The board of BNDES approved yesterday, the 23rd, a financing up to US$ 200 million for exports of Brazilian goods and services to Argentina, destined to the natural gas transport expansion project of Transportadora de Gás Del Sur (TGS), a company controlled by Compañía de Inversiones de Energía S. A. (Ciesa), which on its turn has an equity interest from Petrobras Energía S. A. (PESA), a Petrobras subsidiary in Argentina. 

This refers to the retaking, after five years, of the use of Reciprocal Payment and Credit Agreement (CCR) of Latin American Integration Association (ALADI) for running BNDES financing operations of Brazilian exports of goods and services to Argentina. CCR is an instrument allowing the compensation of payments arising from exports and imports between countries in the region, representing an important mechanism for trading increase and implementation of infrastructure projects. The South American integration is a foreign policy priority for the Brazilian government, having BNDES as an important instrument. TGS transport capacity expansion will guarantee a higher offer of natural gas and electricity to Buenos Aires Metropolitan Area, which concentrates over 50% of Argentina's population, a country that since 2004 faces an energy crisis. 

BNDES financing will be divided in two operations, from which US$ 170 million is for exports of goods and engineering services and construction by Construtora Norberto Odebrecht (CNO) and US$ 30 million refers to goods (pipes) produced by Confab. The supply of Brazilian goods by CNO will contemplate machinery and equipment, pipes and other materials, including steel plates produced in Brazil by the steel industries Usiminas and Cosipa. 

BNDES credit support to exports of Brazilian goods and services for TGS project will be made under the scope of Post-Shipment Program (a line destined to trading of goods and services), under the supplier credit mode (refinancing to the exporter, which receives in Brazilian currency, in Brazil). The importer of Brazilian goods and services is Fideicomiso de Gás Del Sur, managed by Nación Fideicomisos S/A, a full subsidiary of Banco de La Nación Argentina (BNA).

Through this operation, BNDES supports the strengthening of productive chains and the internationalization process of the Brazilian companies, with direct and positive impacts on the trade balance for Brazilian commodities and services. Under the supplier credit mode, BNDES pays to the Brazilian exporter, in Brazilian currency in Brazil, an amount equivalent to the exports performed, following the accomplishment of the completion schedule of works. The Argentine importer, on its turn, pays the BNDES financing in hard currency, guaranteeing therefore the incoming of funds to Brazil. 

The TGS expansion project will allow an increase of up to 2.9 million cubic feet per day the transport capacity of General San Martín and Neuba II pipelines. The works will be performed in pipeline distances between Tierra Del Fuego (Patagonian region) and Bahía Blanca, and between Bahía Blanca and Buenos Aires, with the construction and assembly of pipes for a total extension of 508.85 km. The project should be completed in August 2005, contributing to an increase in the energy availability at the neighbor country, an important partner of Brazil in Mercosul. 

TGS transports about 60% of the gas consumed in Argentina, supplying directly distributors, electric generators and industries, through a pipeline system of 7,419 km extension, which connects the country's south and west gas reserves to their main consumption centers. Its transport capacity is 62.5 million cubic feet per day, with an installed power of 538,220 HP. 

BNDES financing formalization to Brazilian exports of goods and services destined to TGS expansion project was made possible through the Argentine government viability of operations ran under CCR. Such initiative will represent a reopening of CCR as an impelling instrument for trade financing and integration between countries in the region. 

In addition to Confab's pipes and Usiminas and Cosipa's steel plates, the expansion project for General San Martín and Neuba II pipelines will involve exports of goods from several other Brazilian companies. 

In accordance with information provided by CNO, the supply of goods may include products from the following Brazilian companies:

COMPANIES	PRODUCTS/SERVICES
Usiminas / Cosipa	Supply of steel plates
Confab	Manufacture of Ø 30'' and Ø 36'' pipes
Vanasa / IVC / MNA / Valcont / SCAI	Valves
HCI / SCAI / CONFLANGE / CONFLAN	Accessories
Nivetec / Conaut / Yokogawa / Metroval / Ultraflux	Measurement and telemetry equipment
Conaut / Smar / Emerson	Telemetry systems
Techint S.A.	Project
Ingersoll / Sulzer	Gas pump
Scania / Munck	Munck trucks
Stemac	Generating Unit
Bambozzi	Welding machine
Volvo / Scania	Hoist truck