April 10, 2013 / 10:31 PM / in 5 years

Brazil's BNDES backing Embraer's foreign Super Tucano sales

* Military planes to Guatemala, Senegal backed by BNDES

* Minister says aircraft sales part of defense strategy

By Brad Haynes

RIO DE JANEIRO, April 10 (Reuters) - Brazil’s state development bank helped finance recent sales of Embraer SA’s military aircraft to Guatemala and Senegal, a senior executive said on Wednesday, underlining a commitment to projecting the country’s military influence in emerging markets.

Luiz Carlos Aguiar, the head of Embraer’s defense unit, said the state bank known as BNDES had helped finance the six Super Tucano light attack planes sold to Guatemala and the three such aircraft purchased by Senegal.

“There is a credit line as part of a strategy aimed at defense,” Aguiar told journalists at the LAAD defense show in Rio de Janeiro. “It’s not so different from what you see elsewhere in the world,” he added, comparing the program to financial guarantees on European defense exports.

State funding has long helped Embraer find buyers for its commercial aircraft, but the BNDES loans on military hardware for countries with limited access to credit markets highlights a sharper diplomatic focus.

“From the point of view of our defense strategy, this is a moment of tighter relations with the African continent and especially with Senegal,” Brazil’s Defense Minister Celso Amorim said at a signing ceremony with the head of Senegal’s armed forces on Wednesday.

Amorim and also signed a letter of intent to supply Senegal with Brazilian-built navy patrol ships.

Emerging market nations such as Brazil and China are pressing hard to produce military aircraft that compete with traditional U.S. and European powerhouses for research-rich markets in developing parts of Latin America, Asia and Africa.

China is actively using finance to foster its aviation industry. State-owned China Aviation Industry Corporation, known as Avic, set up a private equity fund to finance the purchase of military and civilian aerospace companies.

Late last year a group of Chinese investors agreed to pay $4.2 billion deal to buy 80 percent of International Lease Finance Corp, which owns the world’s second-largest passenger jet fleet, from American International Group Inc. (Additional reporting by Guillermo Parra-Bernal; editing by Gunna Dickson)

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