Development through

InnovationMay, 2015

US$ million BNDES KfW CDB KDBBrazil Germany China South Korea2012 2012 2012 2012

Total Assets 367.825 657.347 1.191.597 147.067

Credit Portfolio 254.019 526.401 1.016.959 85.572

Net Profit 3.009 3.063 9.995 836

Return on Assets (%) 0,90 0,47 0,92 0,50

Non-perfoming loans (%) 0,06 0,21 0,30 1,60

Foundation 1952 1948 1994 1954

Employees 2.853 5.190 8.038 na

BNDES & Other Development Banks

InfrastructureInfrastructure

Heavy Industry – Consumer GoodsHeavy Industry – Consumer Goods

Technological DevelopmentTechnological Development

EnergyEnergy

AgribusinessAgribusiness

ExportsExports

Urban and Social DevelopmentUrban and Social Development

Social InclusionSocial Inclusion

InnovationInnovation

SustainabilitySustainability

Small BusinessSmall Business

50’s 60’s 70’s 80’s 90’s 00’s Today

Imports SubstitutionImports Substitution

Privatization ProgramPrivatization Program

Timeline

Innovation: Definition

“An innovation is the implementation of a new or significantly improved product (good

or service), or process, a new marketing method, or a new organisational method in

business practices, workplace organisation or external relations.”

(Oslo Manual – 3ª Version)

“An innovation is the implementation of a new or significantly improved product (good

or service), or process, a new marketing method, or a new organisational method in

business practices, workplace organisation or external relations.”

(Oslo Manual – 3ª Version)

Increase production efficiency

Create better quality jobs

Improve competitive positioning of organizations

Generate economic or social value

Increase sustainable growth

Increase environmental sustainability

To blend various financial instruments (equity, debt, bonds, etc)

To operate as a complement for other institutions within the Brazilian Innovation System

To be present in all sectors of the economy

GuidelinesGuidelines

Objective: Objective: Capacity-building and the development of innovative environments to…

BNDES’ Innovation Policy

Performance Evolution

BNDES Innovation Disbursement

(US$ million)

(as % of total)

Innovation Financing

CompanyCompanyCompanyCompany ClientsClientsClientsClients

Business Plan Investments

Acquisition of Locally developed

products

Local companies development through the support of

investment plans, innovation, M&A and overseas initiatives

Global Companies that wish to set Brazil into its global

development strategies, with high local value aggregation and/or exports from Brazil

Objective: Objective: To foster the Brazilian Innovation ecosystem through 2 initiatives

BNDES supports not only the companies, but also its clients!

BNDES’ priority: Innovation Policy and instruments to support all companies

Equity

Closed and Open Mutual Funds

BNDES INNOVATION

PROSOFT, PROFARMA, PROPLASTICO, PRO-Aeronautical, PRO-Engineering, BNDES O&G

SECTORIAL

Automatic Produts

BNDES Card

BNDES Automatic

FinancingLines

Direct Participation (stake in the company)

Criatec Program (Seed Money)

Eligible Items

CompanyCompanyCompanyCompany

* For some credit lines, when there’s no locally produced similar

Tangible and intangible assets

Technology acquisition

Workforce training

Lab infrastructure

Locally produced equipment

R&D workforce

Physical infrastructure: Computers, datacenters, construction,

reforms, furniture, tools

in generalMarketing

investments

Imported Equipment*

Innovation Strategies

Innovation Investment Plan

(IIP)

Repayment capacity

Be commercially registered

Tax and social securities obligations paid up and in order

Have collateral to cover the operational risk

Comply with environmental legislation

Borrower’s Requirements

Innovation Sample

Non-exhaustive

Innovation Sample - ICT

ALL public traded TECH companies in Brazil have been supported by BNDES!

Non exhaustive

Fostering Brazilian Optical Technologies

Photonic Device Amplifier for Submarine ApplicationPhotonic Device Amplifier for Submarine Application

RESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENTINDUSTRY TRANSFERINDUSTRY TRANSFER

Integration of more than 120 optical components

Substantial reduction (up to 3x) the cost of the amplifierIntegrated Photonic Chip

~ 120Optical

components

Chip OTN Processor for Applications in 100 Gbit/s OTNChip OTN Processor for Applications in 100 Gbit/s OTN

40nm technology, 15mm x 15mm

220M Transistors

Final Remarks

Innovation is a strategic priority of our country

Government agencies have been engaged to enhance the country’s innovation capacity

BNDES provides a wide range of financial instruments

Credit and Equity

Support for companies of all sizes and of all sectors

We expect private sector mobilization

Our Our main goalmain goal is to is to accelerate innovationaccelerate innovation

http://www.bndes.gov.br/inovacao/

Francisco Coser

Manager - ICT Financing

+ 55 21 2172 7286

francisco.coser@bndes.gov.br

Thanks!

16

BNDES Innovation

• Eligible Items: physical infrastructure + tangible and intangible assets

• Direct Operation: financing and/or capitalization

• Minimum Amount: R$ 1 million

• Participation: up to 70%

• Term of loan: up to 12 years

• Guarantees: defined during analysis

Innovation Strategies

Innovation Investment Plan (IIP)

CompanyCompanyCompanyCompany

Objective: Objective: to support innovative efforts that aims to increase

competitiveness and that are aligned with the strategy and outlined in

companies’ Innovation Investment Plans. It includes product, process or

marketing innovations and the investments to improve the competences

and technical knowledge in the country.

↑

BNDES Automatic

Objective: Objective: to provide financing, through Accredited Financial

Institutions, for implementation, expansion, recovery and modernization of

fixed assets, as well as projects in Research, Development and

Innovation, in the sectors of industry, commerce and agribusiness.

• Direct or indirect operation

• There is no minimum value

• Maximum amount: R$ 20 million

• It is divided into financing lines, with specific goals and financial

conditions

• Participation: up to 90% of eligible items

• Term of loan: defined by the Accredited Financial Institution

Indic

ated

for

SMEs

↑

Criatec

• Criatec I: R$ 100 million (80% BNDESPar) – end of investment period

• Criatec II: minimum of R$ 170 million (80% BNDESPar) – manager selection period

• Criatec III: public contest coming

• Duration: 10 years (first four: investment period)

• Investment Policy• Companies with maximum net turnover of R$ 10 million• At least 25% of porfolio made of companies with net turnover under R$ 2.5

million• Maximum investment per company: R$ 2.5 million

• Sectors under focus: IT, Biotechnology, New Materials, Nanotechnology, Agribusiness, among others.

Objective: Objective: to capitalize innovative micro and small companies with

seed capital and offer them appropriate management support

↑

19

BNDES Card

Limit up to R$ 1 million by issuing bank

Fixed installments within 48 months

Revolving and pre-approved credit

Automatic use

Small and Medium-sized Enterprises

Accredited Suppliers

Based on the concept of a credit card, it aims to finance investments in

MSMEs in a fast and simplified fashion. In the case of innovation, the

process is to be financed, not the projects. Services are provided by

accredited suppliers.

↑

BNDES Card: Financial Conditions

Micro, small and medium size enterprises.

Clients

Revolving credit up to R$ 1 million, for the acquisition of equipments, products and services accredited by BNDES.

Credit Limit

0.99% p.m. (as of March, 2015)

Cost

From 3 to 48 equal and fixed monthly installments.

Amortization Period

BNDES Card: Examples

Vehicles

FurnitureBuilding Materials

Computer & Software

As of October, 2014:

663.000

R$ 51.5 billion

R$ 9.9 billion

R$ 77.000

254.000

63.000

Since its release, back in 2002, the BNDES Card has already held 3.26 million transactions, totaling R$ 47.18 billion in disbursements.

BNDES Card: Statistics

Cards Issued

Total Credit

Disbursements 2014

Average Credit Limit

Accredited Products/Services

Accredited Manufacturers and Retailers

R$ 14.000Average Ticket

23

BNDES PROSOFT

• Eligible Items: R&D + physical infrastructure + tangible and intangible assets• Direct Operation: financing and/or capitalization• Minimum Amount: R$ 1 million• Participation: up to 70%• Term of loan: up to 8 years• Guarantees: defined during analysis

Business Plan Investments

Acquisition of Locally developed software

CompanyCompanyCompanyCompany

Objective:Objective: To foster Brazilian IT industry through 2 initiatives

↑

ClientsClientsClientsClients

Local companies development supporting investment plans,

innovation, M&A and overseas initiatives

Global Companies that wish to set Brazil into its global development strategies, with high local value aggregation and/or exports from

Brazil