ANNUAL REPORT 2015

THE BRAZILIAN DEVELOPMENT BANK Understand how BNDES works and the results it delivers to society.

PERFORMANCE R$ 135.9 billion were disbursed in 954,208 operations with 221,114 clients. Learn about the main activities of infrastructure, social and production inclusion, and in support of the competitiveness of Brazilian companies.

INTERNAL ENVIRONMENT Learn more about governance, transparency, relationships, financial sustainability and developing competence at BNDES.

ANNUAL REPORT 2015 CONTENTS

4 5 6 12 EDITORIAL BRAZIL AND THE THE BRAZILIAN HOW DOES WORLD IN 2015 DEVELOPMENT BANK FINANCIAL SUPPORT WORK?

REGIONAL AND TERRITORIAL DIMENSION INNOVATION 30 36 SOCIAL AND 44 ENVIRONMENTAL BNDES AND SOCIETY STRATEGY AND RESPONSIBILITY INFRASTRUCTURE: VISION FOR A DECISIVE SECTOR THE FUTURE 17 22 26 28 BNDES IN GOVERNANCE, FINANCIAL DEVELOPING NUMBERS CONTROL AND SUSTAINABILITY COMPETENCE MANAGEMENT PRACTICES 49 54 56 58 COMPETITIVENESS SOCIAL AND GLOSSARY/ CREDITS/TELEPHONE OF BRAZILIAN PRODUCTION GRI INDICATOR NUMBERS AND COMPANIES INCLUSION CHART ADDRESSES EDITORIAL

This report presents the highlights of our elaboration of a methodology to define PDF version, available on our digital library performance in 2015, focusing on economic, materialities, which is expected to be (www.bndes.gov.br/bibliotecadigital). social and environmental aspects. Starting formalized in 2016. The IR is an international The report ranges from January to out from our capitals – financial, human, initiative aimed at improving the quality December 2015 and comprises the entire intellectual, social and relationship- of corporate reports in an effort towards BNDES System, which includes the Bank’s based, natural and manufactured – and greater transparency and stability in seven facilities – Brasília (Federal District), Rio the prospects that comprise our 2015 the worldwide economic system. de Janeiro (Rio de Janeiro state), São Paulo strategic map, we present our main In this perspective, this report features (São Paulo state), Recife (Pernambuco state), fields of activity in the past year. reorganized sections and the presentation Belém (Pará state), Montevideo (Uruguay) Once again published in a magazine of new information, such as an overview of and Johannesburg (South Africa) – as well format, this edition seeks to reach – in the Brazilian and world context and the as the subsidiaries: BNDES Participações S.A. a simple and direct way – all audiences identification of our capitals. (BNDESPAR), operating in the capitals interested in our activities and serve Throughout the report, readers are market; the Special Agency for Industrial as gateway for those seeking to know referred to additional contents in other Financing (FINAME), dedicated to fostering how BNDES creates value for society. sections of the report or on our website, the production and commercialization of This material results from progress and also to the glossary, whenever a technical machinery and equipment; and BNDES PLC, in adopting the Integrated Report (IR) or specific term is used. The 2015 report whose main purpose is to the support the principles, as the review of the reporting continues to use the Global Reporting insertion of Brazilian companies abroad, process carried out in 2015, and the Initiative (GRI) indicators and has also a located in London (United Kingdom).

Learn more about the Integrated Report on http://www.theiirc.org.

ICONS USED Term explained in the glossary IN THIS REPORT GRI indicator 4 As a result of rounding up, the sum of the numbers in the charts might not be exact; similarly, the sum of the percentages in the charts may not total 100. For the same reason, there may be a small variation between the values presented in the report. ANNUAL REPORT BNDES 2015 ANNUAL REPORT BRAZIL AND THE WORLD IN 2015

The year 2015 was marked by the recurrence to a low carbon economy, such as the growth in Brazil. Prominent in this of the previous year’s macroeconomic Paris agreement during the 21st UN context is the support to investment in scenario and the persisting sluggish growth Conference on Climate Change (COP21). the energy and logistics sectors, which of the world’s major economies, resulting involve capital-intensive projects. in the continuing economic slowdown BNDES in 2015 of international trade. The deterioration The economic and political difficulties faced of Chinese activity indicators negatively by Brazil influenced our performance, impacted commodity prices, and the increasing the cost of loans and reducing expected rise of the base interest rate of the disbursement of resources. The year the United States of America increased was also marked by a growing questioning volatility in emerging markets such as of our work by society and control agencies, Brazil. Internally, the crisis was intensified culminating in the establishment of a by the impact of the fall in commodity Parliamentary Commission of Inquiry (CPI) prices and reduced public spending in an by the Brazilian House of Representatives. already stagnated economy. The weak Aware of the demands of society and economic activity of 2014 deteriorated control bodies, we have increased our in 2015, and business and consumer efforts of accountability and transparency. Learn more in the confidence levels remained at historic In June 2015, for example, we reformulated section “BNDES and society”. lows. In addition, the adjustment of our transparency website on the Internet. relative prices put pressure on inflation Access was facilitated and information (high inflation of administered prices and on operations – which had been already depreciation of the R$/US$ exchange rate). featuring objectives, borrowers and loan All these factors led to the loss of Brazil’s values since 2008 – was expanded with investment grade, in December 2015, the inclusion of key financial conditions by the rating agencies Standard & Poors (terms, rates and guarantees). and Fitch Ratings. Thus, the profitability In 2015, we also sought to internalize of companies remained below historical the highest international standards in average levels, and the risk of investing sustainability and environment, related in stocks increased due to the uncertainty to both the analysis of investment of the macroeconomic scenario. projects and the practices to be However, in the face of other challenges, implemented by companies in Brazil. such as those related to climate change, To this end, we endeavored to match 2015 also marked the beginning of the the standards of the best similar financial quest for a new framework of economic institutions and thus to improve our

growth both in Brazil and worldwide. methodology for the systemic analysis 5 The nations agreed on new commitments, of projects, involving also the stages of such as adopting the agenda of Sustainable follow-up and effectiveness of projects. Development Goals (SDGs) of the United Finally, we maintained our focus on Nations (UN), to be implemented by expanding investment in infrastructure 2030, and formulated plans to transition in order to drive the recovery of economic ANNUAL REPORT BNDES 2015 ANNUAL REPORT THE BRAZILIAN DEVELOPMENT BANK

In this section, learn more about BNDES, WHO ARE WE? WHO ARE OUR our activities and how we operate. MAIN AUDIENCES? We have been operating since 1952 and WHAT IS A we are now one of the major development We interact with many audiences, from DEVELOPMENT BANK? banks in the world. As the main instrument the abovementioned government agencies to implement the Federal Government’s up to every Brazilian citizen, comprising Development banks are public institutions investment policy, our mission is to suppliers of goods, services and financeable that emerged in the 1940s, during foster the sustainable and competitive items, clients, financial agents, opinion worldwide postwar reconstruction development of the Brazilian economy, leaders, institutional partners, the efforts. Since then, they have played a generating employment and reducing academic community, among others. significant role in the socioeconomic social and regional inequalities. To this In 2015, the BNDES Relationship development of the countries and regions end, we support various segments of the Policy System was approved. This policy where they operate, in accordance economy and businesses of all sizes. stemmed from extensive work to identify with their different stages, whether the our key partners and audiences. Besides scenario is one of stability or crisis. listing and describing them, the policy Each institution has its own way of HOW DO WE RELATE provides values and guidelines to govern operating, but similarly all of them invest TO OTHER LEVELS OF our relationship with each one of them. intellectual, human, social and financial GOVERNMENT? capital – the latter generally employing public sources – to help implement policies, We are a federal publicly-owned company complement loans provided by the private linked to the Ministry of Development, financial sector, and prompt the private and Industry and Foreign Trade.* Our efforts See also the section public sectors to take risks and challenges are established by the Advisory Board, “BNDES and society”. concerning long-term strategic investments. the Auditing Committee and the Fiscal Over the recent decades, growing attention Council, and we report to several levels of has been paid by these institutions to government: the Ministry of Finance, the the integration of economic, social and Central Bank, the Office of the Comptroller environmental spheres of development. General** and the Federal Court of Accounts.

Besides Brazil, several countries have * In 2016, BNDES became linked to the Ministry of Planning, Development and strong development banks, such as Germany, Budget. China, Japan and Spain. Some also use ** In 2016, the Office of the Comptroller General became the Ministry of Transparency, Supervision and Control. separate instruments to finance public

6 policies, such as development financial institutions operating in specific economic sectors (export and innovation bodies and international cooperation agencies, for example) or long-term investment initiatives. ANNUAL REPORT BNDES 2015 ANNUAL REPORT WHAT RESOURCES WHAT ARE OUR DO WE HAVE? MAIN ACTIVITIES?

Our activities are supported by the Financial support Producing knowledge following basic resources: for enterprises We produce regular analyses of the We support projects related to investment, economy, the economic sectors and national Structured processes and acquisition and export of goods and development, which serve as a basis for solid governance practices services, as well as other types of our activities and a point of reference Financial support is granted according to enterprises through long-term financing for those interested in the topic. We also the principles of delegating functions, and capitals market operations. support – through non-reimbursable with different activities within the Economic sectors and priority issues are resources – technical studies or third- process assigned to different groups defined, based on public policies, on the party research on specific topics related and decisions made collectively. economic scenario and on the country’s to the economic and social development demands. Support conditions are defined of Brazil and other territories, such In-depth knowledge of by our operational policies, established in as Latin America and Africa, offering the Brazilian economy the form of products, lines of credit and opportunities for Brazilian companies. Acquired from monitoring supported programs. Priority sectors and areas have projects over six decades of activity and different conditions: better rates, longer Assisting the government carrying out economic studies and analyses. terms of payment and higher percentages to formulate public policies of financial participation by the Bank. Based on the produced or supported Financial resources knowledge, and on the experience Most part of the available resources for Structuring public concession acquired over more than sixty years new supported projects come from the projects and public-private of activities, we contribute to the return on Bank credit operations. partnerships development of public policies that We support public concession projects and promote the sustainable and competitive People public-private partnerships at all levels of development of the Brazilian economy. Qualified personnel committed to government, taking part in the several upholding the institution’s values, hired stages of the process, such as contracting by means of a public recruitment exam. feasibility studies and research, issuing public notices, running the public tender Institutional relations and authorizing the private sector. With the government, clients,

associations, financial institutions, 7 and civil society, among others. ANNUAL REPORT BNDES 2015 ANNUAL REPORT THE BRAZILIAN DEVELOPMENT BANK

Learn about BNDESPAR’s operations in the section “How WHAT ARE OUR does financial support work?”. Learn more in the section INSTRUMENTS OF “Competitiveness of FINANCIAL SUPPORT? Brazilian companies”.

Meeting the varied needs for financial Capitals market Other funds support with a comprehensive view of We also work with other instruments of There are also guarantee funds, which development is one of our challenges. financial support. In the capitals market, complement our financing guarantees, Therefore, we boast a portfolio of different this happens through the subscription such as the Export Guarantee Fund (FGE) support instruments in tune with the of bonds, corporate securities in public and the Investment Guarantee Fund (FGI), economic scenario and the country’s offerings and investment funds. an important instrument to expand access demands. Learn about some of them: Through BNDESPAR we perform to credit for MSMEs. In this case, there the subscription – in public or private are no disbursements for operations, only Financing placement – of shares or other securities payments to the financial agent who has We offer financing products tailored to convertible or exchangeable into shares taken on the credit risk in case of default. each investment purpose, such as purchase or in any way convertible, redeemable or There are also funds to finance specific of machinery, business modernization or backed by shares. Equity stake is minor sectors in which the origin of funds and expansion projects. Each product may have and transient, with no executive role. the support regulations are external. lines of credit designed for specific types Investing in primary public offerings In this case, we only invest the resources of customers and industries. They offer of simple debentures, we operate in the through a product, as with the Merchant different financial conditions for each following modes: market debentures and Marine Fund (FMM) and the Climate Fund. objective, such as interest rates and terms of infrastructure project debentures. payment. The products may also be linked We also periodically select – through Non-reimbursable funds to temporary credit programs targeting a public notices – managers for investment We also provide financial support through particular economic sector or purpose. funds focused on specific regions, sectors or non-reimbursable funds to social, cultural, Financing may be granted directly company sizes that we wish to encourage. environmental, scientific and technological to clients or through accredited financial Following the selection, BNDES becomes one projects, complementing reimbursable institutions, such as commercial banks. of the fund's shareholders, alongside other financial support for these strategic areas. In addition to financing operations, support investors attracted by the manager. Thus, Resources derive partly from our profit, as in may also be granted through the BNDES we help leverage resources to capitalize the case of the Social Fund, or from external Card, a product geared towards micro, Brazilian companies and support a more donations, such as the Amazon Fund, small and medium-sized enterprises dynamic capitals market in the country. of which we are managers. It is noteworthy (MSME) and individual microentrepreneurs. that, in the case of non-compliance with Functioning like a credit card, it is issued the conditions of the non-reimbursable by financial agents with a credit limit of up support, the beneficiary institution is to R$ 1 million and a fixed interest rate. obliged to repay the resources received. 8

Learn about the process of granting credit in the section “How does financial support work?”. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Learn about the updated conditions on our website (www.bndes.gov.br). WHAT DO WE DELIVER TO SOCIETY?

Attentive to development in Brazil and which showed the immediate results and Operational policies in order to meet upcoming challenges, effects achieved by the interventions All our financial support instruments are regulated we operate in an all-encompassing, we supported over that period. and consolidated in our operational policies (PO), regularly monitored for updates. diverse and comprehensive manner. The report features a wide range of In 2015, given the scenarios predicted for the More than a mere goal, the sustainable indicators that reflect immediate deliveries next three years and following the new strategic and competitive development is a dynamic or the effectiveness of financial support. guidelines of the institution, financing terms required process that, at each stage, requires the In addition, the document consolidates and adjustments, such as: reducing the use of the long-term interest rate (TJLP); complying with the basic spread institution to perform differently. summarizes studies that seek to analyze target; maintaining investment stimulus; boosting the In recent years, we have carried out the results achieved and the causes of the simplification of financial conditions; maintaining the structure of sets of conditions and ranges (maximum a series of efforts to assess our performance observed impacts, i.e., the evaluations of and minimum limits) for investment of financial in an attempt to ascertain and improve effectiveness. The information is organized conditions in non-automatic operations; and a our contribution to the sustainable and within the strategic planning themes, such greater incentive to use financial instruments complementary to credit. competitive development of the Brazilian as contribution to regional development, Despite an increase in basic remuneration and a economy. Information is generated and social inclusion, encouragement to decrease in our maximum participation for almost organized by means of the Monitoring initiatives of innovation and green all credit lines, special conditions were preserved in priority areas such as innovation, environment, and Evaluation System (M&A), allowing economy, and expansion of economic, corporate social investment (ISE Line), waterways, the monitoring and evaluation of our urban and social infrastructure. railroad transport, sanitation, urban mobility – rail and bus rapid transit (BRT) – aquaculture, public projects, programs, products and policies. We are also aware that, like any management, automatic operations for MSME and The system aims to contribute to the company, our activities may generate support lines for the commercialization of Brazilian analysis of new operations by our staff negative impacts, and therefore products abroad (BNDES Exim Post-shipment). In some of these cases, BNDES’s remuneration can reach 0% to better guide the learning process of we seek to chart and mitigate the (as in the innovation lines and the ISE Line related to our planning and provide accountability risks inherent to its operations. communities), and the Bank's participation can reach 100% (as in the ISE Line related to communities and to society. Some activities involve

BNDES Exim Post-shipment). partnerships with other institutions to See also the section “Governance, control and carry out analyses, ensuring the viability management practices”. of independent, high-quality evaluations. In 2015, a major delivery in this process was the 2007-2014 Effectiveness Report,

Learn more in the section “BNDES in numbers”. 9 ANNUAL REPORT BNDES 2015 ANNUAL REPORT THE BRAZILIAN DEVELOPMENT BANK

HOW DO WE CREATE VALUE?

An institution creates value by transforming its available inputs into benefits for society. Learn about our model to create value, which shows – in a simplified way – how we use our capitals, transforming our inputs into results and major deliveries in favor of the Brazilian development.

FINANCIAL (p. 20, 21, 26 and 27)

NATURAL (p. 40 to 43) HUMAN (p. 22, 28 and 29)

MISSION To foster sustainable and competitive development in the Brazilian economy, generating employment while reducing MANUFACTURED social and regional inequalities (p. 23)

VISION INTELLECTUAL To perform its duties as the (p. 34 and 36) development bank of Brazil, an institution of excellence that is innovative and proactive in light SOCIAL AND

10 of the challenges in our society RELATIONSHIP VALUES (p. 30 to 35) Commitment to development Public principles Excellence OUR CAPITALS Ethics ANNUAL REPORT BNDES 2015 ANNUAL REPORT Adoption of better Participation in innovative governance and Projects of investment companies, transparency conducted in the whole supporting business practices by the national territory in several plans with limited supported companies sectors of the economy, offer of capital by clients of all sizes Strengthening of the capitals market and Creation and development of a long-term financial maintenance Support to the industry in the country of jobs formulation of DELIVERIES TO SOCIETY public policies

Increment of the Complementation of

Strengthening of the production of the private financial

productive capacity and national machinery system, contributing to of the competitiveness of Credit support and equipment and the flow of investments Brazilian companies in moments of the trading of in economy of crisis goods and services

Opportunities Social and Performing of productive of esport and activities of greater internationalization inclusion dynamism and risk, Expanding of of Brazilian companies such as green economy the economic, and innovation urban and social infrastructure

Expanding of the number of companies with capital invested in stock exchange Sustainable development of the Brazilian economy

ACTIVITIES Local anddevelopment regional Adoption of better practices of social and environmental responsibility by financial support Strengthening of the supported the micro, small and companies medium enterprises structuring of projects production of knowledge public policies Immediate results 11 Medium/long-term goals

INPUTS KNOWLEDGE INSTITUTIONAL RELATIONS PEOPLE

PROCESSES FINANCIAL RESOURCES BNDES 2015 ANNUAL REPORT HOW DOES FINANCIAL SUPPORT WORK?

FINANCING PROCESSES Each of these steps involves different In order to request our direct AND FORMS OF SUPPORT teams, with decisions taken collectively. support, the amount requested must The stages in the process of granting exceed R$ 20 million. In some specific After being submitted to BNDES, support vary in accordance with the cases, such as support for projects a request for financial support goes amount of financing requested and the related to innovation, energy efficiency, through various stages of evaluation, possible participation of an accredited reforestation, recovery and sustainable from submission to release of funds. financial institution in the operation. use of forests, among others, direct

1 OPERA CONSULTATION CT TIO E N IR S D Submitting a consultation SUBMISSION to BNDES with information TO BNDES on the company and the As of project to be financed. RS 20 million

SUBMISSION TO BNDES ELIGIBILITY 2 The Bank’s Priority and Eligibility Department analyzes the request, in accordance with FINANCIAL previously established parameters. AGENT INDIRE IC C Learn more Does the project contribute to the sustainable AT T O about CEC M P and competitive development of the country? O E and other T R A committees Does the company have the financing U T in the section A I - conditions required? O “Governance,

N

N control and What are the most appropriate financing O

S management N As of RS 20 million practices.” products to meet the support request (fixed income, variable income or combined products)? Does the project involve any In indirect operations, financing analysis guarantees, respecting certain rules and environmental risk? 1 Operations classified as eligible are identified in is carried out by the accredited financial limits. The list of accredited institutions accordance with their environmental risk profile and

12 institution, which takes on the credit risk is available on the BNDES website. classified into three levels (A, B and C): significant or (non-payment) of the operation. Therefore, The NON-AUTOMATIC INDIRECT regional impact risk; lesser or local impact risk; no apparent environmental risk. the institution may accept or refuse the OPERATIONS involve amounts above R$ 20 million and follow the same flow of direct Eligibility analyses are forwarded to the Credit request for credit. In addition, it negotiates operations. These occur when the client prefers Eligibility Committee (CEC), comprised of the financing conditions with the client, such to request support through a bank it already employees from all areas of the Bank, which as a term of payment and some required works with or another financial institution. discusses whether the request will be approved. ANNUAL REPORT BNDES 2015 ANNUAL REPORT 2

Company assessment methodology BNDES uses the Company Assessment Methodology (MAE) to evaluate the intangible assets of the support can be requested for financing with accredited agents allows its resources to Bank’s main clients. The assessment looks into topics such as governance, innovation, human amounts below that limit. reach the whole country. Indirect operations resources and the company’s level of commitment In indirect operations, on the other can be automatic or non-automatic, to socioenvironmental responsibilities and local hand, our partner financial institutions depending on the amount of the support. and regional development. (commercial banks, credit agencies etc.) Learn more about how the During the financing process, MAE generates inputs for risk analyses and the eligibility and analysis serve as intermediaries in granting financing. financial support process works in the stages (stages 2 and 3 of the infographic). As BNDES has no branches, the partnership following infographic. 3 ANALYSIS AND APPROVAL 4 AWARDING Once the request is classified as eligible, multidisciplinary technical teams specialized in Approved requests the economic sector of the project carry out a are awarded. market analysis and analyze more thoroughly An important feature in our the guarantees offered, the economic- contracts is the so-called Social financial viability of the project, the social and Clause, which outlines the fight environmental aspects of the project and the against discrimination based on company’s corporate strategy and governance. race or gender, child labor and slave labor in Brazil. The technical analysis is submitted to the The practice of such illegal acts approval of our Board of Directors, which by the company may result in the deliberates on the approval. operation being suspended or terminated ahead of time.

SUBMISSION TO BNDES

DIREC 5 IN T O DISBURSEMENT IC PE T R A A AND FOLLOW-UP M T I O O Resources are released in stages, T N FINANCIAL

U

S AGENT in accordance with the project’s

A Up to implementation schedule. BNDES RS 20 million analyzes the documents that attest financial compliance with the contract, besides visiting the 13 In AUTOMATIC INDIRECT OPERATIONS, the partner institution seeks the supported projects. the process at BNDES is swifter, because approval of BNDES, which verifies In the case of indirect operations, the request does not require our previous the appropriateness of the proposal the financial agent performs the assessment. It is the financial agent that and releases the resources. Automatic detailed follow-up, and BNDES receives, classifies and analyzes the request operations involve financing amounts monitors the operations for funding. After credit is approved, up to R$ 20 million. through samples. ANNUAL REPORT BNDES 2015 ANNUAL REPORT HOW DOES FINANCIAL SUPPORT WORK?

FINANCING THE EXPORT OF BRAZILIAN GOODS AND SERVICES

For 25 years we have supported Brazilian How does BNDES support exports? exports in various sectors of the economy, Provided to meet exporters’ needs and in to the exporter, who will produce giving priority to higher value-added accordance with the characteristics of their and export the goods. segments. Over this period, we have activities, support for exports follows the In the case of financing for mainly met, through our lines of credit, normal stages of the financing process. commercialization of goods and services, the needs of exporters of industrial The difference is the participation of other the modality is called post-shipment. Support is and agricultural machinery, buses, actors and instruments that define the offered as a refinancing to exporters through incentive for jobs trucks, construction machinery, railway parameters to grant credit or are responsible the discount of securities related to the sales supply chain equipment, aircraft, ships, electronics and for providing the financing guarantees. installments granted by the exporter to engineering and construction services, We finance both the production the importer, or through BNDES’s financing bound for 45 countries in Latin America, of Brazilian export goods and the contract with the foreign importer for the North America, Africa, Europe and Asia. commercialization of machinery, purchase of Brazilian goods and services, Our support enables the equipment and services abroad. In any with the intervention of the exporter. 1 commercialization of Brazilian goods and modality, all resources are released in In both cases, as disbursements also take E services abroad by providing Brazilian reais, in Brazil, to Brazilian exporters. place in Brazil, in reais, there is no foreign EXPORTER export companies with financial conditions Financing for production of export remittance. In most operations, payment of for production and marketing compatible goods is called pre-shipment. In this financing installments by the importer to with international practice, allowing them modality, the operation is done through BNDES occurs through a custodian bank. to operate in the international market a financing agent that takes on the The infographic on the right explains 3 P US on equal terms with their competitors. credit risk and passes the resources on how the post-shipment modality works. financial agent/ Brazilian society benefits in many custodian bank 4 ways. The export of goods and services generates employment and income in the country and contributes positively P R R to the balance of payments and the supply chain, especially of micro, small 2 5 IMPORTER and medium-sized companies (MSME). Brazilian exports support system As a major source of demand for Several agents are part of the Brazilian exports support system, establishing guidelines for us to award credit Brazilian goods and services, the exports and influencing our decisions. They are: can boost economic activity, raising the Camex Council of Ministers of the Foreign Trade Chamber (CAMEX) – it sets guidelines, parameters and criteria for ABGF growth rate of the gross domestic government financial assistance to exports and the guarantee of operations under the Export Credit Insurance, under the terms of the Export Guarantee Fund (FGE). product (GDP). Thus, the export sector is Cofig the only one that generates, simultaneously, Export Credit Insurance – an instrument developed by the Brazilian government, in line with instruments offered by the governments of other countries (through the so-called export credit agencies) to ensure the foreign exchange reserves, jobs for Brazilians, financing of exports of goods and services for longer periods. and productivity and competitiveness Exports Financing and Guarantee Committee (COFIG) – it classifies and monitors FGE operations, establishing gains for the economy in general, conditions for awarding financial assistance to exports and the provision of Federal Government guarantees, contributing to sustainable development. based on calculations by the Bank of Brazil and ABGF.

14 Brazilian Guarantees and Funds Management Agency S.A. (ABGF) – a public company linked to the Ministry of Finance,* hired by the Federal Government to analyze the business, political and extraordinary risks of operations and price the coverage of export credit insurance for later evaluation and approval of COFIG.

Bank of Brazil – Federal Government financial agent for the PROEX-Equalization program, which analyzes and submits requests to the assessment and approval of COFIG.

* In 2016, ABGF became linked to the Ministry of Planning, Development and Management. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Support for commercialization of goods and services abroad (post-shipment line of credit)

incentive for jobs supply chain

1 E EXPORTER

3 P US financial agent/ custodian bank 4

P R R 2 5 IMPORTER

Camex ABGF

Cofig 15 ANNUAL REPORT BNDES 2015 ANNUAL REPORT HOW DOES FINANCIAL SUPPORT WORK?

Learn more about this activity and some of the supported companies in the sections “BNDES in numbers”, “Financial sustainability”, “Infrastructure: a decisive sector”, and “Competitiveness of Brazilian companies”.

OPERATION IN THE CAPITALS MARKET

BNDESPAR, an integral subsidiary of is encouraging the adoption of best practices funds, segments in which BNDESPAR is the BNDES, is our right arm in operations in of sustainability and enhancing corporate main investor in Brazil. Our commitment to the capitals market and an important tool governance and innovation capacity among the capitals markets for small and medium- in our mission to promote the sustainable national companies, including micro, small sized enterprises is also a mark of our development of the Brazilian economy, and medium-sized enterprises (MSME). work – ten of the 14 companies currently complementing the financing products Thus, our performance in variable income listed on Bovespa Mais receive or have offered to the supported projects. is consistent with our strategic objectives of received investments from BNDESPAR. The integration between fixed contributing to the development of the access Finally, we highlight the support for small and variable income instruments market and the funds industry; investing in and medium-sized innovative companies. empowers the activities of development innovation; encouraging good governance Currently, BNDESPAR supports – with variable institutions in several countries. and management practices; among others. income instruments – more than one hundred In our case, it also contributes to expand This activity, initiated in 1974, has proved innovative companies from various sectors, our financial sustainability. to be effective, inasmuch as it contributes to especially those based on technology. These BNDESPAR seeks to support processes strengthen the capital structure of Brazilian are companies that, thanks to our resources, of capitalization, development and growth companies and realize their investment plans. stand out for having growth rates above the of Brazilian publicly- and privately-held From 2007 to 2014, for example, we took average of their competitors and for bringing companies by strengthening their part in 18% of follow-on operations in Brazil, hundreds of new products and services to capital structures and promoting their and in structuring various investment funds, the market, generating new patents and competitiveness. A further goal of BNDESPAR notably venture capital and seed capital employing highly qualified technical staff.

VARIABLE INCOME PORTFOLIO OF THE BNDES SYSTEM PER SECTOR

O

P L Our variable income portfolio ended December 2015 with a market E value of R$ 69 billion

16 distributed per sector, as shown in the chart.

O ANNUAL REPORT BNDES 2015 ANNUAL REPORT The 2007-2014 BNDES Effectiveness Report is available at BNDES IN NUMBERS www.bndes.gov.br/relatorioefetividade.

CONTRIBUTION TO FIXED-INCOME INVESTMENTS

Besides regularly monitoring the supported interests and the grace period or variation includes items not financeable by BNDES), projects and our operational and financial in the foreign exchange rate, even when participation in disbursement is relevant, performance, we are improving the their investments are terminated. This can averaging 10% between 2007 and 2015. monitoring and assessment of efficiency lead to the interpretation that investments Our capacity to induce investments and and effectiveness in our activities in fall when granted financing increases, when effects on the economy varies according support of the country’s development. what is actually increasing is the debt. to the type of project, sector, supported Therefore, analyzing our contribution to company and financial instrument, so Regular credit statistics published investments in the country requires relating evaluations of effectiveness are responsible by the Central Bank of Brazil refer to them to our disbursements, since both are for analyzing thoroughly and with technical evolution of banking loan portfolios and flow measurements. Of total disbursements, rigor the outcomes that can be attributed are appropriate for comparisons with the values were selected referring to fixed to our work. Therefore, we are making capital stock of the economy, but not to assets, with noteworthy investment in efforts to identify with greater precision our investment. As our financing operations building, purchase of machinery and impact on the economy, not only on actual are long-term and part of them are in equipment, and transport equipment. investments, but also on the social benefits foreign currencies, the borrowers’ debts In relation to total investments in the country generated from them, so as to learn from often continue increasing due to operation (Gross Fixed Capital Formation – GFCF, which the results and improve our support tools.

BNDES’S CREDIT PORTFOLIO AND DISBURSEMENTS DISBURSEMENTS TO FIXED ASSETS AND COMPARISON WITH GFCF (in R$ billions at 2015 prices) (in R$ billions at 2015 prices)

17

Credit portfolio (stock) BNDES’s disbursements to fixed assets Disbursements (flow) Disbursement to fixed assets / GFCF ANNUAL REPORT BNDES 2015 ANNUAL REPORT BNDES IN NUMBERS

OPERATIONAL PERFORMANCE

In 2015, we disbursed R$ 135.9 billion. adjustment policy implemented by to the sectors of electricity, Compared to the previous year, there the Federal Government. transportation logistics and was a 28% drop in disbursements. Even in the face of the downturn green economy, as well as the The performance followed the slowdown scenario, we maintained consistent sustained level of disbursement in demand for new investments levels of support in key areas. for innovation projects and the and was influenced by the fiscal We highlight the growth in releases BNDES Card, exclusively for MSMEs.

R$ 81.5 billion DISBURSEMENTS AND TOTAL NUMBER OF OPERATIONS PER PURPOSE IN 79,040 OPERATIONS

R$ 32.7 billion IN 127,833 OPERATIONS

R$ 11.2 billion IN 746,734 OPERATIONS

R$ 6.8 billion IN 271 OPERATIONS

R$ 2.9 billion IN 67 OPERATIONS

R$ 0.4 billion IN 200 OPERATIONS R$ 0.3 billion IN 13 OPERATIONS

Capitals Exports Machinery microcredit Investment BNDES Card Non-reimbursable

18 market Financing of production or and equipment Onlending for microcredit projects Pre-approved revolving credit support Subscription of bonds, commercialization of Brazilian Support to the operators to lend smaller Financing of undertakings to acquire products, inputs Non-reimbursable financing corporate securities in public machinery, equipment and acquisition, production or amounts to registered of companies of all sizes, and registered services of social, cultural, offerings and investment services for exportation commercialization of national and unregistered in various economic sectors environmental, scientific funds (via BNDESPAR) machinery, equipment, and microentrepreneurs, usually or technological initiatives computer and automation with no access to the products, including for leasing traditional financial system operations and agricultural machinery, equipment and implements ANNUAL REPORT BNDES 2015 ANNUAL REPORT R$ 135.9 billion DISBURSED in 954,208 OPERATIONS with

221,114 RS 31.3 bilLION RS 6 billion RS 18.9 billion CLIENTS (not including individuals) GREEN ECONOMY INNOVATION SOCIAL DEVELOPMENT 5 4

DISTRIBUTION PER REGION (% of disbursement amounts) 3

SERIES OF TOTAL DISBURSEMENTS (IN R$ BILLION) NORTH 8.7 190.4 187.8

NORTHEAST 156.0 16.6 138.9 135.9

CENTER-WEST 9.5

SOUTHEAST 43.9

2011 2012 2013 2014 2105 SOUTH 21.3

DISTRIBUTION PER CLIENT SIZE DISTRIBUTION PER CLIENT SIZE DISTRIBUTION PER SECTOR (% of disbursement amounts) 3 (% of number of operations) 3 (% of disbursement amounts) 3

A L PE

T 19 L

SE

MSME: Considering individuals and micro, small and medium-sized companies, i.e., those with gross operating income up to R$ 90 million. Medium large: Companies with gross operating income between R$ 90 million and R$ 300 million. Large: Companies with gross operation income above R$ 300 million. ANNUAL REPORT BNDES 2015 ANNUAL REPORT BNDES IN NUMBERS

See our financial statements and the Administrative Report on the BNDES website. FINANCIAL RS PERFORMANCE RS 930.6 RS 877.2 billion Our net earnings reached corporate stakes, R$ 8.3 billion RS 782 billion R$ 6.2 billion in 2015, a drop lower than in 2014, partially RS 715.5 billion of 5.4% compared to the offset by growth in income billion R$ 8.6 billion recorded in the from financial intermediation, 624.8 billion previous year. The variation from R$ 13.4Total billion assetsin 2014 stemmed from the results of to R$ 18.7 billion in 2015. Total liability R$ 624.8 billion 2011 R$ 715.5 billion 2012 INFORMATION PER SEGMENT R$ 782 billion 2013 (in R$ billion) R$ 877,2 billion 2014 Net R$ 930,6 billion 2015 earnings R R

Segments Treasury Total assets Variable income Fixed income Non-allocated

2014 2015

CASH FLOW PER SOURCE OF RESOURCES / 2015 Total liability AT

R

20 In 2015, the return on our operations continued to be the main source for For comparison purposes, our disbursement budget. the instruments eligible to be deemed core capital are classified as liability with the National Treasury in all years. 2011 2012 2013 2014 2015 ANNUAL REPORT BNDES 2015 ANNUAL REPORT Credit portfolio and onlendings BNDES DEFAULT X SFN SFN Our main asset includes financing conducted directly by Our default rate reached 0.06% on December 31, 3.6% 3.6% 3.4% BNDES or through partner financial institutions. The 6.8% 2015, below that of the National Financial System growth compared to 2014 reflects the appreciation of the 3.0% (SFN), reflecting good management and the high 2.8% dollar over the portfolio in foreign currency, which reduced quality of our portfolio, consistency in operational the impact of the 3.7% decrease of the fixed-rate portfolio, policies, and our role as a development bank. The BNDES represented mainly by operations under the Investment low volume of renegotiations carried out – equal to Maintenance Program (PSI). In 2015, credits classified 2.1% of the credit portfolio and onlendings in 2015 – 0.14% 0.06% 0.01% 0.01% 0.06% between AA and C levels – considered low risk – accounted is one more indicator that confirms the care we take for 99.4% of the total portfolio, higher than the average of in granting credit. 2011 2012 2013 2014 2015 92.4% in the National Financial System (SFN).

Corporate stakes Shares that the Federal Government held in BNDES RESULT (in R$ million) FINANCIAL INTERMEDIATION as capital, as well as minority and transitory investments 18,691 RESULTS that represent an instrument to support capitalization, 13,384 12,457 to develop national companies and to strengthen 7,205 11,578 These are results of investing resources Brazil’s capitals market. The 17.3% drop in 2015 reflects in credit portfolio and onlendings, the depreciation of the corporate stake portfolio in as well as bonds and securities, net after non-affiliated companies, especially Petrobras and allowances for credit risk, deducted from Vale shares, affected by the international fall of the fundraising costs of financial liability. commodity prices and the negative scenarios of the The 39.7% rise in income from financial capitals markets. intermediation in 2015 is mainly due to the growth of the average credit portfolio Bonds and securities and management of treasury resources. Comprising mainly public bonds and debentures, which accounted for 98.6% of the balance on December 31, 2105. 2011 2012 2013 2014 2015 RESULTS FROM CORPORATE Other assets Financial intermediation results Tax expenses STAKES Results from corporate stakes Other revenues and (expenses) Basically comprising repo operations, tax credits and These are results from equity equivalence, receivables from the National Treasury, accounting for Net earnings revenue from dividends and interest on 78.4% of the balance on December 12, 2015. own capital; divestiture of corporate shares; variable income derivatives, impairment Net equity expenses and variation in quotas of Indicators 2014 2015 investment funds in participations. As determined by the Brazilian Central Bank, from Basel Index 15.9% 14.7% The performance of companies in the 2015 onwards, the instruments eligible as core capital, Principal Capital Index 10.6% 9.8% commodities sector contributed to the totaling to R$ 36.6 billion on December 31, 2015, are Tier 1 Capital Index 10.6% 9.8% increase of R$ 6.9 billion in impairment no longer presented in Net Equity and now integrate ROA 1.0% 0.7% expenses and the decrease of R$ 2.7 billion the liability with the National Treasury. However, ROE* 21.2% 15.4% in revenue from dividends and interest on to calculate the regulatory equity of the BNDES own capital, culminating in reduced results * 2014 Return: differs from figure published in the 2014 systems, these instruments are considered as from corporate shares in 2015. core capital. Annual Report due to the accounting reclassification addressed in Note 25 of the 2015 Financial Statements. Other assets The Merchant Marine Fund (FMM), issuance of debentures and agribusiness letters of credit (LCA) accounted for the balance of other assets on December 31, 2015.

Fundraising abroad ADDED VALUE DISTRIBUTED | 2015 GENERATED AND DISTRIBUTED WEALTH Issuance of bonds, loans from multilateral institutions 6 and other loans. In 2015, R$ 2.8 billion were raised P An important indicator in assessing the through external fundraising, exclusively by means social role, the Added Value Statement of loans from multilateral institutions. (DVA) presents, using a global view T towards performance, the company’s PIS-PASEP and FAT contributions to generating wealth for R the economy in which it operates, and its Since 1988, the PIS-PASEP Fund has not received further resources, which are now allocated to the Workers’ effective distribution to employees, the Assistance Fund (FAT). Of the total of this revenue, the government, financial agents and their shareholders. The wealth generated and Brazilian Constitution guarantees that 40% is secured for 21 BNDES. The cost is mainly pegged to TJLP, or to the dollar. distributed by BNDES in 2015 was R$ 12.6 R billion, down 19.4% compared to 2014, In 2015, R$ 19.3 billion were raised; 88.8% of which came R from constitutional sources. mainly due to the fall in net earnings from one year to the other. National Treasury The National Treasury has been the main creditor since 2010. The cost is mainly pegged to TJLP. In 2015, no resources were raised with the National Treasury. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Learn about our governance structure GOVERNANCE, CONTROL and organization chart on the BNDES AND MANAGEMENT PRACTICES website (www.bndes.gov.br).

The nature of our work requires GOVERNANCE MODEL The Executive Board of Directors is the a careful management process only body with deliberating power and involving various committees – Our governance structure is based relies on an extensive structure of specific which ensure transparent and on addressing issues cooperatively, committees that act as an instrument of collective decision-making – and focusing on transparent and collective strategic alignment, bringing together the commitment and responsibility decision-making. It consists of: Fiscal several of our hierarchical tiers. of managers and staff in carrying Council, Advisory Board, Auditing The following figure illustrates the out their activities with good faith, Committee, Board of Directors organization and composition of the main integrity and transparency. and specific committees. elements of the structure in force in 2015.

Advisory Board Fiscal Board of Council Directors

4 Eligibility, Credit and Auditing Capitals Market Committee Committee (CEC): discusses and deliberates on operational matters relates to eligibility, PRESDENT 1 Risk Management credit and capital markets. 1 Risk Management EPRESDENT AND Committee: monitors ANAN DRETORS Committee the regulatory 5 Finance Committee: environment related analyzes financial, to risk management accounting and equity 2 3 matters and oversees the ANAN DRETORS and internal controls of Budget Planning AND DEPUT the Bank and has three consistency between the Committee Committee ANAN DRETORS specific sub-committees: operational, financial and credit risk, market risk credit dimensions. and operational risk. 6 Management 4 6 5 Committee (MC): works to 2 Budget Committee: its Eligibility, Management Finance normalize management main task is to monitor Credit and Committee Committee DEPUT ANAN standards, promotes the the execution of our Capitals Market DRETORS disbursements budget. strengthening of relations Committee between our fundamental 3 Planning Committee: units and oversees the debates strategic issues, implementation of the oversees the observance strategic guidelines of the rules related defined by the Board of Socioenvironmental External Financial Support to the planning and Directors and Planning Sector Sustainability Relations Concession DEPUT ANAN 22 strategy management Committee provided for Analysis Committee Committee Management DRETORS ANDOR macroprocess, coordinates in our corporate plan and Committee Committee EADS O DEPARTENT the processes of approved by the Advisory definition, formalization, Board and Board of IT Innovation People Support monitoring and corporate Directors. The MC has seven Committee Committee strategy learning, and sub-committees to further Committee directs the execution of discussions and support corporate strategy. decision-making. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Learn about our transparency initiatives and the results of the internal audit in the section “BNDES and society”.

SUPERVISION AND CONTROL See the policy on our website. Transparency and ethics management in 2015 were the organization of a series of Compliance actions As a measure of compliance, transparency lectures in all areas and the creation of an Aiming to systematize and improve involves the disclosure of information of interdisciplinary work group to revise and measures related to integrity and public interest, treated in an appropriate update our Code of Ethics as well as to assist compliance with laws and internal and way. Besides continuously fulfilling requests the formulation of the Policy for Gender external regulations to which we are made by various control and supervision Equality and Valorization of Diversity. subject, we structured a compliance bodies, aware of our responsibility as The committee also opened 72 program, which in 2015 focused on a a public company, we seek to establish preliminary procedures: 47 queries or review of the actions that were already a close and transparent relationship requests for authorization to exercise ongoing in different units. Also in 2015, with our clients and society, informing parallel activities, 13 complaints or the BNDES Policy for Corporate Anti- them of our activities and results. representations and 12 client assistance Corruption was approved, as a result Our commitment to transparency calls. All queries were answered, and the of the institution’s organization and and integrity is also present in the way complaints were analyzed. The issues adaptation to the new environment we exercise ethics management in the addressed included interpersonal conflicts arising from the Law 12,846/2013 institution, carried out by the Ethics and situations of conflict of interest (such and related standards. One of the Committee and its executive body. as the exercise of parallel activities and measures already implemented relates Prominent among the committee’s activities participation in commercial enterprises). to introducing clauses with specific

Management of our infrastructure: Renovations and hiring Annex building manufactured capital In 2015, renovations were carried out in the São Paulo and In 2015, we acquired the plot where the annex building will We are present in the following cities: Rio de Janeiro, Johannesburg offices. In Belém, temporary quarters were be constructed, previously owned by the Secular Franciscan Brasília, São Paulo, Recife, Belém, Montevideo (Uruguay), rented to install a new "virtual office", while rental facilities Fraternity, and initiated geotechnical survey services, Johannesburg (South Africa) and London (England). are scouted for a definite office according to the standards of as well as the structural project. In addition, a company was About 95% of our staff is stationed in Rio de Janeiro, our other regional offices. hired to carry out an archaeological diagnosis of the site, in a building of our own – the Service Building of Rio as was the winning architect of the architectural drafting bid, Regarding the modernization of our work infrastructure, we de Janeiro (EDSERJ) – and in rented offices at Ventura to carry out necessary adjustments. can highlight the implementation of the following initiatives: Corporate Towers, a building complex close to EDSERJ. Tenders related to the construction of the building were hiring and deployment of a corporate printing service, more In 2015, the construction of an annex building was also prepared, such as for works and projects management; transparent as to individual printing costs; acquisition of a initiated, to where some of our activities will be environmental licensing; fire prevention and fighting transferred, eliminating rent costs in the city. It is also new data storage solution, considering requirements of project; air conditioning installations; and the development worth noting that these costs are already being reduced capacity, performance, availability and integration with our of the BIM (Building Information Model). with the vacation of a floor in the Ventura complex and current computing environment; deployment of wireless

The architecture design for the annex building received 23 the renegotiation of rental values when renewing the network infrastructure (Wi-Fi) in the premises of EDSERJ and two awards in 2015: the XII Grand Prix of Corporate contract, which should result in savings of about Ventura; acquisition of software licenses for the maintenance Architecture in the category "public works", and the R$ 15 million per annum. of content management repository; and migration of network II Award of the Brazilian Association of Architecture Offices/ data drives from our file servers to a new storage subsystem. Rio de Janeiro (AsBEA/RJ). ANNUAL REPORT BNDES 2015 ANNUAL REPORT GOVERNANCE, CONTROL AND MANAGEMENT PRACTICES

obligations and statements in models MAIN RISKS Mitigation Actions of contract drafts, in order to encourage the adoption of fair practices and Changes in macroeconomic conditions • Regular monitoring of the economy’s performance The financial return of our operations depends on the and analysis of its impact on our operations. integrity by the beneficiaries of our performance of the Brazilian economy, as our clients’ • Establishment of risk limits, regularly monitored, payment capacity is affected by macroeconomic factors to support decision-making of senior management. financial support. such as inflation, fall in gross domestic product (GDP), • Diversification of financial support portfolio. Also as part of compliance actions, drop in the level of income, rising unemployment, exchange and interest rate variation etc. a standard was developed for procedures Macroeconomic and controls to prevent and combat money laundering and terrorist financing, Volatility of the stock market • Development of methodologies to establish risk Given the volume of our stock portfolio, which limits, defined in a manner that is consistent with in order to prevent commercial or financial includes some of the main assets listed on the our operating strategy in the capitals market. BM&FBovespa Stock Exchange, we are subject to the • Hiring, in 2015, of a system to integrate the activities transactions that aim to benefit from high volatility of the Brazilian stock market, which of variable income portfolio management and risk is reflected in the behavior of our capital over time, analysis and corresponding return, from the stock resources, goods and services originating Market also involving risks related to compliance with and debentures trading stage to accounting and from or linked to illegal acts. regulatory limits. risk analysis. Our guidelines on the subject include, for example, the adoption of Concentration of credit portfolio • Development of methodologies to establish risk limits, procedures that inhibit criminal practices Due to the characteristics of the Brazilian corporate defined in a manner that is consistent with our market, which is considerably concentrated, operating strategy in the economy in our operations in Brazil and abroad our portfolio reflects – to a certain degree – • Formulation of concentration indicators to support (always in accordance with current Credit this concentration. the decision-making process. legislation in Brazil and in countries to

which financed Brazilian companies aim • Identification and systematic analysis of the main to export) and the refusal to transfer operational risks linked to processes, in order to implement remedial actions and develop funds through anonymous accounts methodologies to establish risk limits, including tolerance limits to operational risk. In this sense, or those linked to fictitious owners. in 2015, a work group was set up with the ultimate goal of establishing a risk appetite framework, and an internal survey was carried out to identify the Risk management Operational failures institution's risk culture. Losses resulting from failure, deficiency or inadequacy • Implementation of a business continuity system and internal controls of internal processes, people and systems, or from in order to increase our resilience in contingency external events, inherent to any business. situations. The implementation was concluded in

The existence of adequate risk Operational 2015, and the system was tested in the same year, management and an effective internal when a problem with the power grid of the city of Rio de Janeiro caused a power outage in our control system is essential for the headquarters. The contingency plan prepared for this kind of situation worked perfectly, with no fulfillment of our mission, in accordance damage to the institution. with internal and external regulations and our strategic objectives. The table on the right features the main risks Failure to comply with law and internal rules • Actions within the operational risk management to which we are exposed and the Due to the complexity of the legal and regulatory methodologies, emphasizing compliance with laws framework, as well as changes in laws or regulations and standards that are applicable to our operations actions we deem necessary and special attention to the decisions legal that are applicable to our operations. of administrative and judicial courts.

24 to mitigate them. ANNUAL REPORT BNDES 2015 ANNUAL REPORT MANAGEMENT PRACTICES

In 2015, we proceeded with the access to information, flexibility in credit an ongoing subject of debate and internal AGIR Project, created with the aim approval flow and enhanced controls. construction. Macroeconomic projections of adopting a process-oriented Still in the context of credit, a new are used by the operating areas to assess business model capable of enhancing financial statement tool was finalized, projects, financial simulations and risk administrative and operational enabling the import of information from management. Medium (three years) and efficiency, reducing operating external sources such as SERASA, the Brazilian long-term (15 years) scenarios, on the time and costs, and improving the Securities Commission (CVM) and the other hand, basically aid the activities of quality of information, decision- Accounting Plan of Institutions of the National strategic planning, contributing to the making, internal controls and Financial System (COSIF) and their translation establishment of goals and objectives customer service. In 2015, efforts into an internally standardized format. of the corporate strategy map, based were concentrated in implementing Also introduced in 2015 was the online on the balanced scorecard (BSC). solutions related to the finalistic protocol system of registration forms, which Our goals also include encouraging processes of our business platform. will allow financing requests for most the adoption of good governance and Prominent among deployed solutions investment projects up to R$ 20 million management practices by both supported are those related to credit processes, (with some exceptions) to be submitted companies and partner institutions. such as the FACT (Financial Analysis electronically, and will integrate incoming In 2015, for example, we took part in a and Credit Tools) Credit Risk Platform, data to the system that controls the entities widespread debate, led by BM&FBovespa, which enables the development of risk registered in BNDES, also improved in 2015. with governance experts, government ratings in an automated environment In addition, the initial phase of the agencies, semi-public company managers, integrated with our other systems. Business Portal was developed, addressing scholars, lawyers and market professionals This initiative, combined with the new foreign trade operations. Queries on the to draft initial proposals for the credit risk system, which regulates indirect pre-shipment line for exports improvement of corporate governance the approval and control of our are now sent by financial agents via an practices in state-owned companies. clients’ credit limits, is an important online form, which generates an electronic See also the section milestone for the improvement of document directly filed with BNDES. “Strategy and vision for the future.” management and processes, allowing Estimates and scenarios for the Brazilian greater integration, security of and international economy have also been 25 ANNUAL REPORT BNDES 2015 ANNUAL REPORT FINANCIAL The section “BNDES in numbers” features data on the Bank’s SUSTAINABILITY equity, cash flow, default rate and other results.

To carry out our mission, we need to be a is to provide liquidity for infrastructure in sustainable development, such as financially healthy and robust institution. projects already supported by us and renewable energy and urban mobility. Therefore, we seek to work our financial capital establish a form of support for debenture In addition to providing financial resources, with the aim of diversifying products, reinforcing issuers, reducing investors’ perception the institutions also afford opportunities our equity structure and manage the risks to of the credit risk of this instrument for technical cooperation, essential to which we are exposed. and stimulating greater investment of improve the standards of social and private resources in these papers. environmental analysis of the projects. Diversifying and In order to diversify our funding sources, integrating products Equity structure in 2015 we consolidated the strategy of We are the main long-term funding Our long-term financial sustainability requires primary issues of Agribusiness Letters of instrument in Brazil. Therefore, our strategic efforts to build an equity structure that is Credit (LCA) on an electronic platform priority is to help create different support suited to our financing support budget. private placement regime, before authorized mechanisms for investments with prolonged The worsening crisis in Brazil and the institutions, with issues on a monthly basis. maturity periods, involving other agents and persisting volatile international scenario The balance amounted to R$ 6 billion in sources of resources. The combined use of provided us, in 2015, with the opportunity the year. LCAs are credit securities, issued fixed-rate instruments (such as financing and to repurchase our securities on the by public or private financial institutions, debentures) and variable-rate instruments international market and to manage our which confer right of lien on agribusiness (such as shares and quotas in investment liability in an unprecedented way, confirming credit rights to which they are linked. funds) expands possibilities to finance, our proactivity also in adverse conditions. while paving the way to developing a long- The first repurchase transaction was term financing industry in the country. successfully completed in November HOW DO WE ADDRESS OPERATIONS IN DEFAULT? Besides enhancing our support, 2015, amounting to US$ 634 million of An important aspect in reinforcing our equity structure variable-income initiatives used to face value, generating an accounting and its financial sustainability is the fact that, thanks to thorough analyses of requests for support, we have an complement financing contribute to income of US$ 28.4 million. Among the extremely low default rate. increase our financial sustainability. main consequences of this operation Each fiscal year, the default rate has been significantly lower In 2015, an important initiative to are the creation of more attractiveness than the National Financial System average, which means that repayments of such financing have become one of encourage debentures in the local market for future emissions, the creation of the main sources of resources for new support throughout was the creation of the Liquidity Support liquidity for foreign securities, and the the years. Line (LSL) for debenture interest. positive displacement of the proceeds of Some operations, however, go into default. When this occurs, the first effort is to try to renegotiate the debt out LSL consists of a credit line to be offered these securities in our interest curve. of court, seeking an agreement between parties. Thus, the to debenture issuers contingent on the Aimed at diversifying our funding economic feasibility of the company is assessed, seeking payment of a contract fee. This line will sources, in 2015 we signed international an alternative that preserves jobs and keeps the company solvent whenever possible. enable the coverage of interest flows loan contracts with the Japan Bank for Renegotiations for 43 credit operations in default were to be paid to debenture holders up to International Cooperation (JBIC), the concluded and approved in 2015, totaling to approximately R$ 3 billion. Over the same period, some R$ 1.17 billion 26 the maximum contracted amount. The Kreditanstalt für Wiederaufbau (KfW), were received. maximum amount offered by LSL is the the Institute of Official Credit (ICO), If negotiations are unsuccessful, collection procedures are equivalent of two years of interest, and and the Nordic Investment Bank (NIB), implemented through legal action, calling in guarantees the term of use can be set by the issuer, amounting to approximately R$ 3 billion (machinery, equipment, vehicles etc.). In these cases, principles and norms published by regulatory bodies are potentially covering the entire duration (US$ 772 million). These loans are mainly adopted – especially those from Central Bank of Brazil – of the debenture. The purpose of the line earmarked for investment projects aimed at mitigating risks. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Learn about the main risks of our activities, implemented mitigation actions and assessment of internal controls in the section “Governance, control and management practices”.

Risk management and return One of the main objectives of our risk activities, in 2015 we also implemented a new customers regarding the total portfolio, management and internal controls is to methodology to survey and measure events in overdue operations and allowances for contribute to our financial sustainability by all areas, which enabled a comprehensive view losses, instruments for mitigating credit measuring and monitoring credit, market, of the occurrence of this type of risk in the risk, as well as information about our liquidity and operating risks to which we are institution. Another advance in this direction trading portfolio and corporate shares. exposed, and assessing internal controls. was setting up a work group with the ultimate Among the main indicators used in In order to administrate in a single goal of establishing a risk appetite framework. our risk management is the monitoring of platform the management of the variable Regarding the improvement of capital ratios, as required by the Central income portfolio as well as the risk reports, new credit risk indicators were Bank of Brazil. According to the standards analysis and the corresponding return, created in order to provide senior issued by the regulator, we must retain in 2015 we concluded the hiring of a management with a clearer picture of enough capital, called reference equity, system that will integrate these activities, the risk levels we have incurred. to cover our total assets weighted by from the stock and debentures trading It is also worth noting that we credit, market and operational risk. stage to accounting and risk analysis. disclose, every quarter, qualitative and The chart on this page features the In the future, the implementation of quantitative information on the structure total of these variables for December 2013, this system will ensure more active and and management of credit, market and December 2014 and December 2015. It is integrated monitoring of the evolution operational risks in the institution, through observed that the portion of assets weighted of the variable income portfolio through the Risk Management Report. Among by credit risk is the most significant in our advanced risk management techniques. other information, the document sets out institution, and that our capital ratios Seeking to further integrate risk data on the credit portfolio with different are comfortably above the minimum management activities and our other levels of segregation, our exposure to larger amounts required by the regulator.

Access the report on our website.

Own resources and risk-weighted assets* (R$ million) Dec. 2013 Dec. 2014 Dec. 2015 Reference equity (RE) 108,669 97,851 94,997 = (+) Tier I capital 72,446 65,234 63,331 (+) Capital core (CC) 60,418 65,234 63,331 (+) Supplementary capital (SC) 12,028 - - (+) Tier II capital 36,223 32,617 31,665 (-) Deductions from the RE - - - Risk-weighted assets (RWA) 580,237 615,706 644,331 27 = (+) Credit risk 545,944 575,861 601,621 (+) Market risk 23,257 28,055 16,981 (+) Operational risk 11,036 11,790 25,729 Basel Index (RE/RWA) (regulatory minimum = 11%) 18.73% 15.89% 14.74% Tier I capital index (NI/RWA) (regulatory minimum = 5.5%) 12.49% 10.59% 9.83% *In international and internal regulations issued by the Central Bank of Brazil, notably the CMN Resolution Nº. 4,193/13, RWA stands for Risk-Weighted Core capital index (CP/ATP) (regulatory minimum = 4.5%) 10.41% 10.59% 9.83% Assets. The CMN resolution establishes the method to calculate RE and RWA. ANNUAL REPORT BNDES 2015 ANNUAL REPORT The figures in this section are consolidated for 2015 DEVELOPING or refer to the workforce COMPETENCE on December 31, 2015.

Developing and adding value to technical and allocated to BNDES from other public Remuneration and benefits 17 18 behavioral competences required to foster administration bodies and temporarily All employees fall under the Collective sustainable development are a constant hired to assume positions linked to senior Bargaining Agreement and are entitled concern when dealing with our employees. management, according to our statutes. to the same wage increase index, as well For us, investing in human capital means We also have 81 employees reinstated as medical and dental care benefits, life investing in a more innovative environment, due to a decision from the Ministry of insurance, day care, educational assistance which is essential to constantly upgrade Planning, Budget and Management and meal allowance, besides profit sharing products, operational instruments and (MPOG),* which are not counted in our and remuneration that is consistent with processes, in a continuous effort to improve permanent staff limit. It is also worth the market. In 2015, the employees kept the quality and efficiency of our operations highlighting that we only outsource on receiving full travel allowance. and their results for society. services unrelated to our core activities, We also offer the option of up to 180 days such as cleaning, security and messaging. of maternity leave, rooms for breastfeeding Personnel 16 These figures result from an expanding and a one-hour allowance for mothers during We ended 2015 with 2,783 employees, trend in staff numbers in the past the child’s first year of life. In 2015, paternity 98.5% of which have been hired for few years, due to the growth of our leave increased from 10 to 15 working days, an indefinite period through public activities. Since 2014, with the lack of new and rates for return to work and retention recruitment exams, according to our needs selection processes to register backup after maternity (67 employees) and

and to Government Federal guidelines. employees, this figure has stabilized. paternity (96 employees) leave was 100%. 20

The remaining 1.5% is made up of those *At the date of this publication, Ministry of Planning, Development Our policies for remuneration and and Management. benefits and staff development strongly contribute to retain talent, as attested by

BREAKDOWN OF ALL STAFF BY the 2.4% turnover rate. 16 Currently, EXECUTIVE AND APPOINTED 14 STAFF PER GENDER CAREER/EDUCATION the proportion of the lowest wage compared

37 18 to the national minimum wage is 373.7%. 19 63% 2

PRIMARY Professional and SECONDARY personal development 12 81 To meet the new challenges we face Male in Female in a position a position today, the people management area was

UNDERGRADUATE reformulated, reinforcing our governance in sponsoring a private pension plan and

EXECUTIVE AND APPOINTED 14 BREAKDOWN OF ALL STAFF our structure focused on fostering personal STAFF PER AGE GROUP BY UNDERGRADUATE LEVEL and professional development of staff. O Noteworthy in this area is the beginning

28 of the Management Development Program, 6 78 17 E A which aims to strengthen new leaderships, increasing delivery capacity and effectiveness of 0 30 50 S results through a practical approach to themes Up to 30 30 to 50 Over 50 E such as sustainability, public management, A ethics, strategy, and people management. ANNUAL REPORT BNDES 2015 ANNUAL REPORT This year, 3,847 training initiatives Diversity and inclusion Health and safety in the workplace were carried out, resulting in 40.6 training We have an ongoing commitment of We regularly carry out health and safety hours per employee, besides support for 56 eliminating all forms of inequality and measures in the workplace, addressed in participants in graduate courses. Integrated discrimination in the workplace and in the recent union agreements, such as regular training planning was all also implemented institutions that participate in our chain evacuation drills in our main building, in 2015, aimed at improving management of relations, having been awarded for providing information on professional and follow-up of learning activities, the fourth time running the Gender accidents and diseases to the union, and ensuring the development of the necessary and Race Pro-Equality seal of approval setting up a service specialized in safety competences to achieve our strategic goals. of the Special Secretariat on Policies for engineering and occupational medicine Women.* One of the highlights of 2015 was together with the BNDES workers’ Social

the approval of the Policy for Gender Equality Security and Assistance Fund (FAPES). 17 AVERAGE TRAINING HOURS PER EMPLOYEE and Valorization of Diversity, besides the These and other initiatives have sponsorship of the 1st International Seminar resulted in lower rates of absenteeism on Violence Culture against Women. and lack of occupational activities at

In the Inclusion Program, created in 2012 high risk of specific diseases. 21 undergraduate level high school level to promote an inclusive environment, since 32h 50h 11h 36h 2015, a percentage of intern positions has female male female male ABSENTEEISM | WORK SAFETY AND 15 been allocated for people with disabilities, and HEALTH RATES (SST) a process was initiated to improve accessibility Injury rate (TL)1 male: 3.27 | female: 3.63 conditions in the work environment. Occupational disease zero rate (TDO) Human resources * At the date of this publication, linked to the Ministry of Justice Lost days rate (TDP)2 male: 8.03 | female: 3.05 management and Citizenship. Southeast Region An additional relevant initiative was the male: 3.42 | female: 3.06 Organizational Environment Survey, an BREAKDOWN OF ALL 14 Center-West Region STAFF PER GENDER male: 0.39 | female: 1.23 important tool carried out with 45% of Absenteeism rate (TA)3 64 Northeast Region male: 0.81 | female: 4.43 the staff. The survey included different 36% North Region dimensions and afforded a greater male: 1.97 | female: 4.55 understanding of the complexity of Female Male Deaths caused by factors related to staff motivation at accidents at work or zero occupational diseases work. The results have already started being used to improve management. 1 Frequency of accidents with injuries, resulting in lost hours. About 2,000 annual work hours per worker were taken into account (NBR 14280), that is, 5,872,000 man-hours, based on employees on December 31, 2015. There was Reaffirming the commitment to BREAKDOWN OF ALL 14 STAFF PER RACE a total of 17 accidents (one typical accident and 16 commuting accidents) with transparency and the improvement injury and leave, involving only Rio de Janeiro (Southeast Region). Incidents that do not generate injury are also controlled in order to minimize risks of future of our management, we are also accidents. Once identified a potential risk, the Bank’s management and/or the B A administration of the buildings in which we own physical facilities are informed in reviewing policies, standards and human order to take appropriate action. 29 2 N Work days, as of the day following the injury up to one day before returning to resources processes to meet eSocial, a work. A total of 185 work days were lost due to occupational accidents (typical and commuting accidents) in Rio de Janeiro (Southeast Region). The total number Federal Government project that has of days programmed is five days/week x 48 weeks/year (considering vacations) for each employee involved. TDP = Days lost/Days programmed x 100. established new ways to provide labor, 3 Medical absence: holidays, study leave, maternity/paternity leave, extensions, social security, tax and fiscal information leave in advance, bereavement, marriage/honeymoon and monitored time-off are not included. The total number of days programmed is five days/week x related to the hiring of workers. 48 weeks/year (considering vacations) x no. of employees per region, based on employees on December 31, 2015. TA = days absent/days programmed x 100. ANNUAL REPORT BNDES 2015 ANNUAL REPORT BNDES AND SOCIETY

Our dialogue with society and our various audiences, in brand management us to fulfill more comprehensively our mission accountability actions contribute to consolidate and sponsorship activities, in disseminating of promoting the sustainable and competitive our social and relationship capital. We work knowledge produced by the Bank, and development in the Brazilian economy, continuously to implement improvements in in promoting transparency. Knowing and generating employment and reducing social channels and vehicles to interact with our understanding the demands of society allows and regional inequalities.

RELATIONSHIPS

Relationship policy Interlocution and transparent 2015 marked the launch of the BNDES information in the financial Relationship Policy System, which lists a set of and global markets 17 audiences with whom we interact regularly, In 2015, we participated in several as well as principles and guidelines to ensure international official missions, such as the that the interlocution with each one of them Annual Meeting of the Inter-American occurs homogeneously and coherently, Development Bank, in South Korea; in line with the institutional vision and mission. the annual meetings of the International With the launch of the policy, we also Monetary Fund (IMF) and the World defined a governance model for managing Bank, in Peru; meetings of Sherpas of the related to the Brazilian economy and the these audiences, based on the identification International Development Finance Club structuring of international operations, of leaders who will be responsible for (IDFC), in Brazil and Peru; the 21st UN and the exchange of experiences monitoring and managing each segment. Conference on Climate Change (COP21), with other financial institutions. in France; the Annual Meeting of the Latin Consolidating our mission of contributing Partnerships and dialogue American Association of Development to the establishment of a favorable business In 2015, two meetings were held between Financing Institutions (ALIDE), in Mexico; environment for Brazil's interests in Africa, civil society and the Forum for Dialogue – and the Annual Meeting of the World we undertook a series of initiatives, especially a structured and direct channel for Economic Forum, in Switzerland. In all of the strengthening of our partnership with dialogue between the Bank and non- them we performed our role of publicizing about 50 financial institutions present governmental organizations (NGOs) and the country’s potential and opportunities, in African countries, in order to create social movements of relevance in the transmitting confidence in Brazilian channels to support Brazilian exporters Brazilian context –, launched in 2013. development and highlighting the long- interested in doing business in the continent. The first meeting in January 2015 analyzed the term scenario as the most appropriate to In 2015, 106 business meetings were held activities in 2014. The second, in November, guide the expectations of economic agents. with African and Brazilian companies

30 addressed support for exports, focusing on Through our offices in London addressing our forms of support, besides environmental aspects, and was attended not (England), Montevideo (Uruguay) and 21 relationship meetings with financial only by Brazilian organizations, but also by Johannesburg (South Africa), we further and development institutions and African international NGOs with focus on this issue. expanded the exchange of information multilateral and regional organizations. ANNUAL REPORT BNDES 2015 ANNUAL REPORT The final report and the documents sent to the CPI are available on the House of Representatives website (www.camara.leg.br). TRANSPARENCY

Transparency Policy The BNDES CPI the dimensions of development In an effort to improve transparency in On August 4, 2015, the House of (economic, social and environmental). the relationship with our various publics, Representatives launched a Parliamentary The document reveals, for example, a transparency policy was approved in Commission of Inquiry (CPI) to investigate that the estimates of the number of 2015, accompanied by practice guidelines. alleged irregularities related to the formal jobs linked to the implementation The policy aims to inform employees on approval of suspicious loans, harmful to of supported projects increased the principles and guidelines that should the public interest, which would have significantly between 2007 (1.2 million govern their activities and reinforce occurred between 2003 and 2015. jobs) and 2014 (3 million jobs). our commitment to providing broad Throughout the period of the access to information, subject to the inquiry, we complied with all submitted Transparent BNDES confidentiality imposed by applicable requests related to summonses of officials In 2015 we introduced the use of the laws. The guidelines, in turn, aim to set and former officials and submission Tableau software program in the out the specific and concrete initiatives of of information and documents. Transparent BNDES section of our the transparency practices of the BNDES The work of the commission of website, replacing the spreadsheet System, as well as the type and form of enquiry afforded an opportunity for information about our operations with access to the information we make public. relevant debates on our role in the more user-friendly graphics and maps. The development of a transparency Brazilian economy, as well as for the The software allows the display of policy complies with the principle of divulgation of our activities to society. information in interactive reports that publicity and the legal precept of the Additionally, we were able to reinforce our enable users to search for specific data. right to information. Moreover, institutional commitment to transparency The adoption of the tool has this initiative represents an alignment and accountability, both for society enhanced our active transparency, making with the practices of high-level and the institutions with authority for information more accessible. In just eight multilateral development banks. control, such as the National Congress. months, since its implementation in April, The final CPI report, published on there have been close to two million visits. Control February 25, 2016, did not identify Also in 2015 we expanded the available Our internal auditing department, directly any illegal practices or acts associated database, allowing queries of operations linked to the Advisory Board, coordinates with our operations, but recommended contracted since 2002, either in the domestic our dialogue with external control and measures for institutional improvement market or related to financing the export oversight bodies, such as the Federal Court and reinforcement that are being of engineering goods and services. Data of Accounts, the Office of the Comptroller duly considered in our strategic are presented in detail, with information General*, and the Central Bank of Brazil. planning and work programs. such as interest rates, payment terms and In 2015 we underwent due diligences guarantees offered in each operation, and audits, which, together, gave rise to Effectiveness including automatic indirect operations 629 requests for information; all of them In line with the process to expand (mediated by accredited financial agents). were properly addressed. In response transparency, in 2015 BNDES also Also available is more summarized to the audit reports, 159 action released its first Effectiveness Report. information on support to exports

plans were presented, 35% of which, Through the available data, it is of goods not related to engineering 31 approximately, were totally implemented possible to relate the contribution of projects, such as aircraft. Information by the end of the fiscal year. our financing with the development related to previous years will be gradually of the country and its influence on made available for consultation. * At the date of publication, Ministry of Learn more in the section Transparency, Supervision and Control. “BNDES in numbers.” ANNUAL REPORT BNDES 2015 ANNUAL REPORT BNDES AND SOCIETY

RELATIONSHIP CHANNELS Website Our internet website received in 2015 a Ombudsperson’s Office SIC monthly average audience of 333,000 In 2015, the Ombudsperson’s Office took part Our Citizen Information Service (SIC) unique visitors, an increase of 33% in several actions aimed at implementing has been in operation since May 2012, over the previous year, especially the greater transparency regarding our following the entry into force of the Transparent BNDES section, which provides performance – such as discussions on the Information Access Law (Law 12,527/2011). access to information on contracts. subject, monitoring the activities of Requests are received in person (in Rio As the first feature of the development the Citizen Information Service (SIC) and the de Janeiro), by telephone, mail, e-mail of the new website, launched in 2015, a new Forum for Dialogue with civil society – and or by the e-SIC system. In 2015, page of the BNDES Cultural Space was made participating in work groups (such as the we received 734 requests for information, available, offering a modern, more enjoyable compliance group) and committees (such all answered within the legal deadlines. and optimized experience for mobile devices. as the relationship and environmental Improving internal communication sustainability committees). Call center within the corporate site (intranet), In addition, it received 1,463 messages Our call center is a channel of a version for mobile devices has also (4% fewer than in 2014), 72.2% communication with the external public, been developed, allowing remote from legal entities and 22.8% from offering information on our products and access by corporate cell phones. individuals, distributed as follows: services. In 2015, this channel answered approximately 667,000contacts from Social networks the general public, 86% of which by In 2015, the Bank launched its fan page on 52.8 telephone and the remainder by e-mail. Facebook, expanding its presence in social Complaints In a post-service satisfaction survey, we networks, besides the previously existing found that 91.8% of clients considered that profiles on Twitter, Slideshare and YouTube. In 17.2 their request had been met and that 94% the latter, our channel received approximately Doubts rated the service as "good" or "excellent." 112,000 views and totaled 2,966 subscribers. As a result of this work, our call center 11.1 ranked second at the XV ABT Award, Press service Requests in the category Quality Management. In 2015, we answered 777 requests, sent In addition, 34 complaints of various out 192 releases and organized four press 4.7 kinds were submitted and answered in the conferences. More than 24,000 articles Reports Complain Here website over the year. citing the Bank appeared in the press. 2.5 Complementary messages*

1.1 Suggestions 32 0,7 Acknowledgments/compliments

ANNUAL REPORT BNDES 2015 ANNUAL REPORT Corporate assistance Institutional lectures Advertising Corporate assistance is a channel dedicated We also received requests from educational The first 2015 campaign began on the web to the needs of every citizen who contacts institutions as well as Brazilian and foreign and spread to the radio and newspapers, BNDES looking for the best alternative delegations to give institutional lectures. focused on contributing to our efforts of credit for their business. In 2015, 836 In 2015, thirty presentations were made – towards transparency and answering contacts were made, 352 in the Rio de in Portuguese, English and Spanish – criticism to the institution, divulging the Janeiro office alone, mostly by micro and to a total audience of 617 visitors. Transparent BNDES section of our website. small entrepreneurs. Our São Paulo office Using the 2015-2018 National Export received 212 contacts, and Recife received Participation in fairs and Plan of the Federal Government as a 83, with an emphasis in renewable energy. sponsorship of technical events hook, the campaign on the export of In 2015, we took part in 18 major fairs in Brazilian goods and services, broadcast Events targeting MSMEs the five regions of the country. There were on free-to-air television, showed how The cycle of lectures BNDES Closer to You 2,046 visits to our stands, 691 alone at the this kind of support brings benefits to aims at disclosing our financing methods Entrepreneur Fair in São Paulo. Through national companies and the country. and is geared towards Brazilian MSMEs. direct contact with technical experts, Closing the year, the campaign Culture In 2015, the talks were attended by 1,624 Brazilian entrepreneurs were introduced to with Development – shown on paid TV people in 12 cities, in all regions of the our programs, credit lines and products. and in cinemas throughout the country – country. The cumulative audience has The support for scientific, technical, and presented our support to Brazilian exceeded 30,000 people over 11 years. knowledge dissemination events also plays culture, showing that investment in the The Credit Seminars, organized in an important role in communicating with creative industry is also a way to promote partnership with the Brazilian Service of our various audiences, whether by providing the development of the country. Support for Micro and Small Enterprises venues for seminars, lectures and meetings in (SEBRAE), are also an important tool for our facilities, or in the form of sponsorship. disclosing our forms of support. In 2015, In 2015, we sponsored 64 technical events, there were 203 lectures in 21 states, the such as seminars, conferences and exhibitions double of the previous year. The seminars related to different areas of our work and also include the presence of financial topics of interest to the institution, totaling agents, enabling their direct contact with over R$ 10 million. Thus, we contributed entrepreneurs interested in our credit lines. to spreading knowledge, promoting business, and professional training and exchange of experiences in various fields.

Advertising campaign on our transparency-related activities, with the slogan “When a bank is transparent, answers come easy.” Source: BNDES collection 33 ANNUAL REPORT BNDES 2015 ANNUAL REPORT BNDES AND SOCIETY

Access our publications on the digital library www.bndes.gov.br/bibliotecadigital KNOWLEDGE AND MEMORY CITIZENSHIP

We share with society the information Publications Considering culture and sport as educational and knowledge we produce internally. In addition to traditional magazines – Revista activities that promote development at Aware that our history has been directly do BNDES (BNDES Magazine), BNDES Setorial personal, community or country level, we related to Brazil's development since (BNDES Sectorial) and publications related to annually sponsor activities in these segments. our creation, we work continuously the BNDES Economy Award –, we produced to preserve institutional memory. the second edition of Panoramas Setoriais Culture (Sectorial Panoramas), focused on the issue Complementing support for structuring cultural Digital library and information of climate change. The articles addressed projects via financing or non-reimbursable management the sectors of automobile manufacturing, funds (such as restoration of historical heritage, The knowledge produced by the Bank cement, mining, pulp and paper, chemical maintenance of collections, and support for is available on our digital library, which and steel industry in order to present a the film and publishing industries, among completed its first year of operation in synthetic view of the situation of each of others), we also sponsor cultural events and October 2015. During the period, the these segments with respect to greenhouse offer activities at the BNDES Cultural Space, library received more than 480,000 visits, emissions. In addition, the publication also located at our headquarters, in Rio de Janeiro. an average of 40,000 visits per month. included a reflection on the importance of In 2015, the BNDES Cultural Space gained More than a thousand documents were development banks to deal with this issue. a new environment: the BNDES Gallery, which included and made fully available in digital Also worthy of mention are the first opened with the exhibition "A walk through form for public access, besides integration edition of the Effectiveness Report and the the heritage of Rio de Janeiro," a tribute to the with social networks to share content. publication of Iniciativa Mata Atlântica city’s 450th anniversary. The new location expands In order to promote the diffusion of (Atlantic Forest Initiative), which provides the venue’s capabilities, offering the public management practices of information an overview of the 14 projects supported exhibitions as part of its free programming, and knowledge, in 2015 we organized by the Bank to restore 3,000 hectares as well as concerts and movies, contributing the II Information and Knowledge of native vegetation, totaling to R$ 42 to democratize the access to culture and Management Seminar of the Brazilian million from the BNDES Social Fund. promoting the national art production. section of the knowledge network The programming attractions are of the Latin American Association of chosen in a public selection process. In 2015, Development Financing Institutions 76 shows were presented in the projects (RIALIDE-BR), which featured 120 "Classical Wednesdays" and "Thursdays at participants from 39 Brazilian institutions. BNDES,” combining classical and popular music. The venue also staged presentations or Memory sessions of events sponsored by the Bank. Continuing the consolidation of the BNDES In 2015, we sponsored 63 cultural events Memory program, in 2015 the Corporate in the fields of film, music, literature and visual Memory Policy of the BNDES System was arts, totaling R$ 32.6 million in support. These approved, presenting the principles, initiatives – focused on disseminating and guidelines and objectives of conservation promoting access to Brazilian culture – were

34 and dissemination actions of BNDES’s Opening exhibition of the BNDES Gallery: also essential to stimulate the creative economy “A walk through the heritage of Rio de Janeiro” institutional memory and its subsidiaries. Photo: BNDES collection/André Telles across the country, affording artists and cultural producers the opportunity to present their work in different Brazilian regions. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Sport Since 2011 we have supported Brazilian CANOE SPRINT sports by sponsoring canoeing, aiming to 4 foster its development and competitiveness Pan-American Games at international level and attract the 3 attention of society to the results achieved. 2 2 2 2 In 2015, R$ 17.9 million were disbursed 1 1 in sports sponsorship, with all projects supported by means of the tax benefit 2007 2011 2015 provided in the Sports Incentive Law

(Law 11,438/06). We continued supporting World Championships canoeing training centers, championships, Foto: Brazilian athlete Ana Sátila Vargas | Foz do Iguaçu, April 2015 3 Photo: Fernando Gallo/Abracan and the participation of Brazilian athletes 2 2 2 2 2 in international competitions. Exposure 1 1 gained in spontaneous media with the state), in which Brazilian athletes took one coverage of these events generated a silver and three bronze medals, another 2013 2014 2015 return of R$ 27 million, based on the first result for the country. In the Pan- advertising value of such exposure. American Games of Toronto (Canada), This investment resulted in many medals canoeing was the second most winning CANOE SLALOM won over the year. In the Canoe Sprint World Brazilian sport, with nine sprint medals

Championship in Milan (Italy), for example, and five slalom medals. Pan-American Championship Brazil won four gold and five bronze medals, At the 2016 Olympic Games in 5 ending in an unprecedented fourth place Rio de Janeiro (RJ), canoeing and 4 overall, and received the Sports Credit paracanoeing can win the first Olympic Award of the International Federation for and Paralympic medals in this sport, 3 3 3 its competitive evolution in the sport. with potential to win up to seven medals. We also sponsored, in 2015, the The competitive evolution of 1 1 Under-23 and Junior Canoe Slalom World Brazilian canoeing is shown in the Championship, in Foz do Iguaçu (Paraná following international results. 2012 2013 2014

Junior and Under-23 World Championship 3

1 1 1

2013 2014 2015 35

gold silver bronze ANNUAL REPORT BNDES 2015 ANNUAL REPORT STRATEGY AND VISION FOR THE FUTURE

Mature planning practices and strategy Strategic corporate Corporate projects management enable the continuous planning Corporate projects are characterized by improvement of the quality and efficiency Strategic corporate planning guides all structural efforts capable of mobilizing of our activities and their results. our initiatives in four main perspectives: different organizational units around critical sustainable and competitive development, issues to achieve strategic corporate objectives. At BNDES we use scenario techniques for financial sustainability, internal processes, Eleven projects were developed strategic planning considering two-time and learning and competence. in 2015, related to: climate change; horizons: 15 and three years. The long-term The first perspective concerns our support for medium-sized companies; scenarios are qualitative and quantitative, not contribution to Brazil’s development, based regional development; production chains; probabilistic, based on economic consistency on government plans and the current operational budget management; progress models, encompassing both Brazil and economic scenario. The other perspectives, in management; important audiences; the world, with emphasis on issues of our albeit also coordinated with the external prioritizing and allocating structures and interest. The main goal is to inspire and environment, are aimed at developing people; information technology; digital guide the institution’s strategic planning. BNDES and its products, processes and information; and business continuity. The three-year scenarios help governance, seeking to improve our For 2016, besides the continuity of formulate goals and objectives for this activities and response to society’s demands. projects related to regional development same strategic planning, using, in addition The challenges associated with each and production chains, new initiatives have to macroeconomic and econometric perspective are identified and divided into been incorporated to address the following models, information from the sectorial strategic objectives, whose evolution is issues: improvement in access; economic survey published in the semestrial monitored through indicators and goals. efficiency; transparency; and integrity. newsletter Investment Prospects. The review of the strategic corporate In 2015, we published externally our long- planning for the 2016-2018 period indicated Transversal themes term scenarios (15 years) and updated the need to reinforce activities to support Our corporate strategy focuses on an the three-year scenarios, internally exports and the infrastructure and resilience integrated vision of development and debated by the Planning Committee. of companies, besides enhancing advances considers several dimensions, such as social, In 2016 we aim to step up efforts in accountability and transparency. economic, cultural and environmental. to obtain and synthesize information Territorial approach, innovation and from external and internal sources in sustainability are key issues for the practice order to build a vision for the future to of this strategy and ensure the fulfillment of direct and guide our profile for 2030. our mission, in line with society’s expectations. These themes are considered essential and transversal in all our operations and activities. Access the article on scenarios in Learn about our the BNDES Magazine 44 and the committees in the section Investment Prospects newsletter “Governance, control and on our digital library. management practices”. 36 ANNUAL REPORT BNDES 2015 ANNUAL REPORT Whenever this symbol appears in the report associated with a significant action or project, the respective initiative also aims at regional and territorial development. REGIONAL AND TERRITORIAL DIMENSION

The strengthening of the territorial our geographical intelligence system partnerships to integrate activities and dimension as an element of our planning (GeoBNDES), aiming to expand the capacity optimize benefits, as well as identifying and operations is an ongoing challenge that to perform integrated analyses of our needs and opportunities that may we have faced in our mission, in particular activities, focused on the investment site. indicate new perspectives for promoting due to Brazil's economic, sociocultural Also in 2015, in line with the strategy sustainable development in the region. and environmental extent and diversity. to expand our activities in regional and The Tapajós pilot project aims to In 2015, we introduced the project territorial development in the country, our prepare our activities in this region, which to improve our Regional and Territorial offices of the North Regional Department is expected to receive a large volume Development Policy and consolidate the were installed in Belém (Pará state). Among of investment in logistics and energy theme internally through a number of other duties, the department aims to foster, infrastructure over the next ten years. initiatives, aiming to spread and instill its structure and monitor the development The region covers six municipalities of understanding among our staff, set guidelines of projects located in the Legal Amazon, Pará (Aveiro, Itaituba, Novo Progresso, and action strategies in the territory, and integrated with the operational areas. Rurópolis, Trairão and Jacareacanga) and is improve our instruments and internal characterized by low population density and governance for territorial performance. The Amazon region and the two federal highways crossing the region, Aiming to deepen the knowledge of northeastern semi-arid region which influence land occupation and use. our employees on the subject, 16 workshops In 2015, once again as part of the project This pilot project will further our were held, bringing together two hundred to consolidate the policy, we developed strategic objectives related to regional employees and 26 external experts, a preliminary methodology of territorial development, particularly in the Project including university professors, researchers, assessment that allows us to observe the Surroundings Policy, identifying and as well as members of the government and main features of the territories in which enabling preemptive actions to mitigate public and private institutions. The topics our operations are located. This assessment – risks and exploit opportunities, especially addressed included theoretical aspects of currently in the development phase regarding the issues of land tenure, regional development, historical issues of through pilot projects – aims to improve indigenous lands, urban infrastructure, Brazilian development and experiences in not only our process of eligibility and energy, communication, transportation, mobilizing different agents and territories analysis of projects, but also the internal social assistance, education, health, in the country. At the end of the cycle of debate on the territorial issue and the institutional development, food security workshops, an article was made with the integration of our technical teams. and appreciation of forest biodiversity. main items debated in the lectures. Throughout the year, two pilot projects The northeastern semi-arid region, Also within the scope of consolidating were developed, in which new procedures in turn, comprises 1,135 municipalities in the policy, initiatives were taken to improve are being tested, including work groups, ten states, covering a wide geographical tools and planning and management area mainly composed of the caatinga processes, as well as adapting instruments. biome and low-income micro-regions. These are: the surrounding areas of the The sample area of this pilot project –

Access the article in Tapajós River, in the Amazon region, the municipality of Salgueiro (Pernambuco 37 Revista do BNDES 44 (the BNDES magazine) and the northeast semi-arid region. state) and its surroundings – was selected on our digital library. The efforts include establishing based on studies to characterize the semi- closer ties with the territory, identifying arid region and on our activities in the studies, partners and local actors. territory, besides the identification of The projects’ objectives include coordinating demands and opportunities, since this region ANNUAL REPORT BNDES 2015 ANNUAL REPORT STRATEGY AND VISION FOR THE FUTURE

INNOVATION

is affected by two federal infrastructure infrastructure; access to basic social services; We believe innovation is essential to improve projects, the Transnordestina railroad and and the recovery of degraded areas. the competitive positioning of Brazilian the integration of the São Francisco River. The charts below show our companies, and therefore the theme is The main issues identified in the disbursements per region in the last five considered a strategic priority for the studies and surveys carried out during this years, in absolute values and participation institution. Innovation helps create skilled jobs pilot project were the following: the new in total disbursements. Resources allocated and increase production efficiency, generating industrial structure in these territories and to the North and Northeast regions of the economic and social value for the country, the Northeast region; activities related country outweigh their participation in and it can be supported through different to logistics, water supply and power the national GDP, which is compatible with financial instruments, such as subscription of generation infrastructure; education and our mission of promoting the reduction shares, onlendings to financial agents and non- science, technology and innovation (S&T&I) of regional inequalities in Brazil. reimbursable funds. In 2015, disbursements on innovation reached R$ 6 billion, accounting for 4.4% of our total disbursements. SERIES | TOTAL DISBURSEMENTS PER REGION (in R$ billion) 3 The volume of released resources showed no significant change compared to 2014, but participation in the total amount released by BNDES increased 37.5%.

Training in innovation 2011 2012 2013 2014 2015 Internally, we have stepped up our training in innovation. In 2015, 147 employees

2011 2012 2013 2014 2015 were trained in the BNDES Innovation

Line and BNDES FUNTEC, two of our most important support instruments in this area. In addition, important names in the REGIONAL PARTICIPATION IN 2011 2012 2013 2014 2015 BNDES'S TOTAL DISBURSEMENTS field took part in internal events to discuss

50% relevant issues concerning innovation, such as physician and neuroscientist Miguel SOUTHEAST 40% Nicolelis, professor Mariana Mazzucato, and 2011 2012 2013 2014 2015 Jaakko Tammela and Luis Alt, two reference 30% points of the Brazilian design thinking.

SOUTH 20% NORTHEAST 2011 2012 2013 2014 2015 CENTER-WEST 10% NORTH

38 2011 2012 2013 2014 2015 ANNUAL REPORT BNDES 2015 ANNUAL REPORT Learn more about the CRIATEC funds in the section In this report, whenever this “Competitiveness symbol appears associated with of Brazilian a significant action or project, companies”. it is an innovative initiative.

International cooperation lamps, with progressive demand for local introduce innovations into the market. In the integration with other government technological content, was formulated Launched in 2014, the program has agencies and bodies to foster partnerships for the public-private partnership of already financed 126 operations. with foreign countries for cooperation the city of São Paulo, predicted to be The CRIATEC funds are another highlight in innovation, we have provided replicated in several Brazilian cities. in the innovation support area: national technical support for negotiations of In the area of health, R$ 650 million funds focused on investments in seed bilateral cooperation tenders in research, were approved for innovation projects capital. In 2015, the process to select the development and innovation (RD&I), in 2015, among them the development managers for CRIATEC III was concluded, issued and coordinated by the Ministry of and production of biotech drugs in the which will feature nine investors. In 2007, Development, Industry and Foreign Trade country. This is an area in which our when the fund was launched, there were (MDIC)* together with its peers in partner support has enabled the generation of only two investors in CRIATEC I (BNDES and countries. We have also participated as a significant results. An outstanding point Banco do Nordeste), which demonstrates member in committees and as a financial is the innovative equipment for diagnosis the success of the initiative in the market. agent of the Brazilian counterpart of the and treatment of skin cancer by means of project. Two public notices were issued photodynamic technology, developed in a SERIES | DISBURSEMENTS TO in 2015, one in partnership with France partnership between the University of São INNOVATION (in R$ million) 4.4% and another with Germany. Also in 2015, Paulo (USP) and the company MM Optics. the third cooperation tender with Israel The product was developed with funds was extended until October 2016. from BNDES FUNTEC, which was released 3.2% in 2010, amounting to R$ 4 million. In its Sustainability and first year, 242 devices were sold, 28 of them 2.7% social development abroad. In all, almost 3,000 people have Projects to develop new technologies been treated in 75 photodynamic therapy 2.1% 1.9% linked to the green economy can be centers throughout Brazil. The technology enabled through instruments that has the potential to be incorporated into support innovation. In 2015, these the National Unified Health System. 0.8% projects amounted to R$ 253 million in 0.4% disbursements. Prominent among them Innovation support instruments are projects of renewable energy and Among the products to support energy efficiency, second-generation innovation, the BNDES Innovation Line 2009 2010 2011 2012 2013 2014 2015 ethanol and new technological solutions is the main instrument. This low-cost for waste treatment and soil recovery. line of credit aims to support increased Disbursements of BNDES for Innovation In the context of intelligent cities, business competitiveness through Onlendings to FINEP financing for LED public lighting was investments in innovation applied to Participation of innovation in total disbursements (including FINEP) structured in 2015, aiming simultaneously to business strategies. These investments may foster the use of cleaner and more efficient include innovation in products, processes,

sources of energy, local development and marketing, besides improving skills and 39 manufacturing of components and fixtures, technical expertise in the company. and use of chips designed in the country – Also worthy of mention is the program the latter being a strategic focus of BNDES’s BNDES Innovative MSME, aimed at Learn about the program performance in the electronics industry. increasing the competitiveness of MSMEs, and its results in the section “Competitiveness *Current Ministry of Industry, To this end, an accreditation model for pilot financing the investments required to of Brazilian companies”. Foreign Trade and Services. ANNUAL REPORT BNDES 2015 ANNUAL REPORT STRATEGY AND VISION FOR THE FUTURE

SOCIAL AND ENVIRONMENTAL RESPONSIBILITY

Further launches Social and environmental issues have always We also take part in the Company Complementing support for innovation, we been present in our activities, whether Innovate plan, an initiative aimed to created new financing instruments in 2015, financing projects whose objectives are foster support projects in various sectors such as the BNDES Exim Innovative Company primarily social and/or environmental, considered strategic by the Federal Pre-Shipment Line and the BNDES Hybrid or incorporating these aspects within our Government. It involves joint plans Securities for Innovation Support program set of support products and instruments, consisting of public notices for the (BNDES THAI). The former seeks to strengthen including through special financial selection of projects to be supported financial support for innovative companies conditions conditioned to sustainability through mechanisms available mainly that take on the challenge to export, criteria. The theme is also considered in at BNDES and FINEP. Since its launch providing special conditions to improve their analysis activities and procedures related to in 2013, ten notices have been issued. competitiveness in foreign markets. The latter the process of granting financial support, In 2015, 14 operations were is an instrument of participative subordinated as well as in administrative activities. contracted under Company Innovate debentures, which proposes to share the risk The principles and guidelines of our notices, forming, along those contracted and return of innovation projects of large social and environmental practices are in 2013-2014, a portfolio of 50 projects companies, especially in the later stages of set out in the Social and Environmental with a total value of R$ 2.8 billion. During the research and development (R&D) cycle, Responsibility Policy (PRSA), approved the year, R$ 513 million were disbursed such as the scaling of first-time processes in 2010 and updated in 2014. On the other for twenty operations. or the development of new products. hand, details of social and environmental The year of 2015 also marked a Another highlight of the year was the action in financial support operations second stage of Company Innovate with launch of BNDES Technological Solutions, are described in the Social and the launch of the Chemical Industry currently in the phase of accrediting Environmental Policy, approved

Development and Innovation Plan suppliers. It is a financial product which in 2010 and updated in 2015. 2 (PADIQ) notice, a joint initiative with aims to foster the market of technology One of the guidelines of our social and FINEP, designed to foster technological and know-how transfer in the country, environmental performance in financing development and investment projects supporting Brazilian companies that wish operations is the environmental risk in the manufacture of chemical to acquire technology solutions and thus rating applied to non-automatic direct products with higher added value. innovate in their products and processes. and indirect operations. In 2015, 380 applications were classified according to Learn more about the forms of support in the section “How their environmental risk. The charts below does financial support work?” show the profile of the classified portfolio.

BNDES FUNTEC: effectiveness The study will be The first assessment was carried out regarding the effectiveness of projects supported by the Technology published in the BNDES ENVIRONMENTAL RISK PROFILE OF THE Magazine 45 (in press) 1 Fund (BNDES FUNTEC), a non-reimbursable support instrument for projects of technological institutions PORTFOLIO CLASSIFIED IN 2015 which, in partnership with companies, develop new products/technologies related to strategic and will be available on our Digital Library. in amounts in number of projects issues. The study comprised a sample of 22 projects contracted between 2007 and 2012, with a total disbursement of R$ 198 million. C The sample projects generated fifty patent applications, 941 people trained, and new technical A skills in various areas: health, chemistry, new materials, bio-energy, information and communication C

40 A technologies (ICT), aerospace, defense, among others. Among the projects that supported research B and development through university-business partnerships, 93% have had their new technologies B introduced in the market or have plans for such. Highlights among the results of supported projects include the development of technologies for the A A remediation of areas contaminated with organochlorine; radio frequency identification (RFID) chips; A compact organic photovoltaic cells; a pilot plant for carbon fiber manufacturing; photodynamic therapy B C for the treatment of skin cancer; and bionic pancreas using smartphone. A ANNUAL REPORT BNDES 2015 ANNUAL REPORT Whenever this symbol appears in the report associated with a Learn more about the significant action or project, the Amazon Fund in the subsection respective initiative also aims at “Project Highlights”. environmental sustainability.

It should be noted that in 2015 there as well as important international values aimed at social development, but was a more intense dialogue with 91 partners, such as representatives of the the relative share of about 14% of our companies, with which we established Norwegian and German governments and total disbursements remained stable. direct operations, concerning risks and nonprofit organizations with expertise environmental and social opportunities, in various environmental sectors. since they were classified as having higher SERIES OF DISBURSEMENTS TO THE GREEN ECONOMY environmental risk (category A) or using the Social performance AND SOCIAL DEVELOPMENT (in R$ billion) 4 5 Corporate Social Investment (ISE) line. 7 We also support projects with direct

impact on improving the living conditions 2011

Environmental support of the Brazilian population, providing 2012

In relation to the preservation and various financing mechanisms that 2013 restoration of natural areas, besides benefit low-income entrepreneurs, family 2014 actions of the Amazon Fund, highlights farmers, states and municipalities; seek 2015 include continuous support to ecological to expand services related to sanitation, restoration with native species, through urban mobility, health, education and green economy social development the selection, in 2015, of seven projects culture; and aim at reducing regional related to the Atlantic Forest biome, which inequalities, among other objectives. will receive around R$ 20 million in total. The observance of social rights by These funds are non-reimbursable, from our clients, such as not using slave labor, BREAKDOWN OF DISBURSEMENTS TO the BNDES Social Fund. There was a high is also an indispensable condition in THE GREEN ECONOMY IN 2015 5 demand in the notice for such projects, our financing approval process, on a with 78 proposals submitted from 14 states. par with the financial and economic A A Regarding the reduction of greenhouse requirements. The positive social impacts S O gas (GHG) emissions, worthy of mention of projects are also considered, such is the pioneering initiative for the as generating and maintaining jobs R generation of energy through second- and boosting local development. generation ethanol, developed in Brazil from sugarcane waste, on which we were Green economy and st invited to speak at the 21 United Nations social development P Conference on Climate Change (COP21). By means of indicators of support for social By supporting this and other initiatives, development and the green economy, we we aim to contribute to the Brazilian assess our efforts and improve our social goal of reaching a 37% reduction in GHG and environmental performance. These emission by 2025, ratified at COP21. indicators also allow comparison with BREAKDOWN OF DISBURSEMENTS In 2015, the event Amazon Day was held other institutions that finance national TO SOCIAL DEVELOPMENT IN 2015 4 in London, with the aim of presenting the and international development. O S main Brazilian environmental initiatives, A growth in disbursements related

including the Amazon Fund. The event to the green economy was observed E 41 P also addressed the themes of green in 2015, both in absolute terms and in P financing and green bonds, with the relative participation. Investments in this participation of several representatives segment increased from 15% to around of Brazil and the United Kingdom, 23% in total disbursements. There was U a decrease in absolute disbursement Learn more in the section “Competitiveness of

Brazilian companies”. BNDES 2015 ANNUAL REPORT STRATEGY AND VISION FOR THE FUTURE

Corporate social investments

Through favorable credit conditions, the which accounts for approximately 90% EVOLUTION OF THE ISE LINE 7 Corporate Social Investments (ISE) Line aims of investments since the creation of this to raise the level of social responsibility of line in 2006, funds are invested in social companies that seek our financial support projects aimed at populations living in and contribute to strengthen public policies. the environs of ventures, in areas of ISE Line resources can be invested geographic influence of companies, or within the company itself or the community. segments of the population exposed to In the first case, resources are geared some kind of social risk. Health, education towards staff and their family, clients or and production inclusion, in urban and rural 2011 2012 2013 2014 2015 suppliers. Within the community, a trend settings, receive most of the investments. disbursements number of operations (in R$ million)

Eco-efficiency Learn about our Watching over our natural capital, we also follow committees in the section “Governance, control and good environmental responsibility practices in management practices”. our operating units. The management of the Rio Implementing and monitoring de Janeiro Service Building (EDSERJ), where most the Social and Environmental of our staff is located (77%), is carried out by the BNDES Condominium (CEDSERJ). Developing efforts Responsibility Policy (PRSA) in energy efficiency, water consumption, In 2015, the plan to implement and 2014, was consolidated in 2015 as a joint waste management, among other activities, we are dedicated to continuously improving monitor the PRSA was approved, committee responsible for monitoring our eco-efficiency. in line with the guidelines established the implementation of activities and The recyclable waste produced in the building goes by the CMN Resolution 4,327/2014. deliveries provided for in the plan. to waste-picker cooperatives, fully complying with The plan's actions are organized The following are among the main the provisions of the Decree 5,940/06. In 2015, 157,000 kg of material were destined for recycling, in five work areas with the following advances of the plan in 2015: such as office paper, scrap metal, newspaper, paper objectives: to strengthen governance in • Formalizing social and environmental towels and plastic cups, 2.5% more than in 2014. The total waste generated was 455,000 kg, sustainability; to promote improvement procedures for export support in

10% less than in the previous year. 10 11 and innovation in processes and activities a specific chapter of the Social In 2015, energy consumption at EDSERJ fell 1.3%, related to dialogue, transparency, and Environmental Policy. and total water consumption dropped 7.8%. communication and accountability; • Including the concept of social and 8 to improve risk management and induction environmental risk in the corporate policies Energy consumption – comparative series of social and environmental performance in of Operational and Credit Risk Management.

activities related to the process of granting • Developing sectorial social and 16,475 16,041 15,831 MWh MWh MWh financial support; to strengthen the Bank’s environmental policies to guide 2013 2014 2015 sustainability culture; and to incorporate environmental analysis in supporting

42 concepts related to sustainability in the critical sectors. The first one was approved

Water consumption in 2015 9 institution's operations and facilities. in 2015: the Social and Environmental Implementing the plan involves forming Policy for the Mining Sector.

63,940,000 LITERS 64,450 LITERS work groups with staff from various • Developing and validating the R B areas. The Social and Environmental presentation of social projects to Sustainability Committee (CSS), created in companies interested in the ISE Line. ANNUAL REPORT BNDES 2015 ANNUAL REPORT See also the PROJECT HIGHLIGHTS subsection “Innovation”.

AMAZON FUND BNDES FUNTEC – RECOVERY OF CONTAMINATED SOIL AND WATER The Amazon Fund aims to raise donations Protected areas for non-reimbursable investments in Sixteen protected areas (PA) in the state of In 2015, the Technology Fund (BNDES FUNTEC) preventing, monitoring and combating Amazonas, covering an area of ten million consolidated a portfolio of 14 environmental deforestation and promoting conservation hectares, have received support from the projects in several areas. and sustainable use of forests in the Amazon Fund. In 2010-2015, 1,400 initiatives One of them provides a solution for the Amazon biome. Since its inception in to support income generation and 900 recovery of soil and water contaminated 2008, the Norwegian government has initiatives to support the empowerment by heavy metals originated from Acid Mine been its largest donor. We are responsible of associations of PA residents were Drainage (AMD) in disposal areas and for managing the fund, raising resources, implemented. These investments reinforced waste dams using ozone gas. To conduct and hiring and monitoring supported several production chains, such those of tests and experiments, as well as scaling initiatives and projects. Governance of the pirarucu, acaí, chestnut, vegetable oils, advanced chemical oxidation technology, Amazon Fund includes a steering committee crafts and community-based tourism. approximately R$ 10 million were disbursed. with the participation of organizations In addition, training workshops, leadership The financing was also destined for the representing civil society, various ministries meetings, lectures and seminars were construction of two pilot plants, one in and Federal Government agencies, held. As a result, the areas served by Poços de Caldas (Minas Gerais state) and and all states in the Amazon region. the program have shown lower rates of another in Criciúma (Santa Catarina state). With total donations of R$ 2 billion deforestation and hotspots than other The results were surprising and received between 2008 and 2015, the areas of the same category in the state. evidenced the possibility of executing Amazon Fund ended 2015 with a portfolio selective precipitation by heavy metals of eighty approved projects, with total Amazon SAR (especially for oxidation of manganese) support of R$ 1.2 billion, R$ 518 million The Amazon SAR project, of the Amazon directly applied to contaminated areas. of which have already been disbursed. Protection System Management and Operations Center (CENSIPAM) of the Ministry of Defense, also contracted in 2015, will improve the monitoring of deforestation in the Amazon region by a Alto Juruá radar deforestation detection system that The Alto Juruá project, contracted in captures images even at night or with 2015 with R$ 6.6 million in resources, obstacles such as clouds, fog and smoke. was the first Amazon Fund project Approximately 950,000 km² will be monitored directly conceived and contracted by an per year (23% of the Amazon biome). indigenous community, unmediated by the public sector or non-governmental Management of indigenous lands organizations. The project comprises In 2015, we issued a public notice focused agroforestry handling and production, on the development and implementation of

as well as monitoring and control of the territorial and environmental management 43 territory, in benefit of the Ashaninka people plans in indigenous lands, through which and other indigenous and non-indigenous we selected nine projects with values communities in the environs of the Kampa between R$ 4.5 million and R$ 12 million. indigenous land, covering a number of The projects aim to directly benefit protected areas in the state of Acre. indigenous peoples of the Amazon region.

ANNUAL REPORT BNDES 2015 ANNUAL REPORT INFRASTRUCTURE: A DECISIVE SECTOR

With favorable financing conditions related In 2015, we disbursed R$ 29.4 billion to finance projects were approved for funding with to payment terms and financial costs, our projects in energy and logistics and R$ 10.4 estimates of issuance of debentures and support has decisively contributed to the billion for urban mobility and sanitation. guarantees shared between the Bank and expansion and improvement of public Also in 2015 we were the main debenture holders. Also in that year, nine services in energy, logistics, urban mobility financing agent of the Logistics Investment projects were supported (five of wind power) and environmental sanitation. Supported Program (PIL) of the Federal Government, through the subscription of infrastructure investments include projects of hydro, which seeks to modernize the country's debentures, totaling approximately wind, thermal, nuclear, and biomass transport infrastructure and is currently R$ 609.2 million in purchased debentures. energy generation; energy transmission in its third stage. As part of this program, In support of business plans of publicly- and distribution; highways, railways, credit was approved in 2015 for two traded Brazilian companies, it is interesting airports, ports, terminals and warehouses; highways in important transport areas to note the subscription and paid-up capital sanitation; and improvement of urban for Brazilian agribusiness and wholesale by BNDESPAR of R$ 1.04 billion in simple roads and high and medium-capacity trade in Mato Grosso do Sul and Minas debentures combined with subscription transport systems. Gerais, and the Brasília, Guarulhos and bonus issued by Energisa S.A. The aim Viracopos airport projects are now of the operation was to strengthen the The expansion of investments in in the final disbursement phase. company's capital structure to facilitate infrastructure – one of our strategic the modernization and expansion of its objectives – is capable of boosting the Capitals market electricity distribution subsidiaries, which recovery of the Brazilian economy, To diversify and integrate financial products, now serve approximately six million fostering improvements to the we have expanded the use of debentures consumer units (7% of the Brazilian population's standard of living, to finance infrastructure, creating a population). BNDESPAR’s investment will integrating regions and increasing the complementary system between our long- enable the expansion of the network and competitiveness and productivity of term financing and funding from the improvement in the quality of power supply companies in all economic activities. capitals market. In 2015, 28 infrastructure in areas served by the company, reducing the frequency of interruptions and service time. Also in 2015, the corporate reorganization of Companhia Brasiliana de Energia was concluded, with BNDESPAR FINANCING IN ENERGY AND LOGISTICS IN 2015 and AES group now participating directly in the capital stock of AES Tietê Energia S.A. In addition to helping create liquidity alternatives for investment in BNDESPAR’s R$ R$ aggregating variable income portfolio and for the migration of AES Tietê Energy to level two

44 22.9 29.4 4,000 MW of the BM&FBovespa Stock Exchange – in billion billion TO TE BRALAN POER RD keeping with our intention to contribute to the improvement of corporate governance in AOUNT APPROED AOUNT DSBURSED 1,844 km N OPERATONS N PROETS O AS N TE OUNTR companies traded in the Brazilian market –, the reorganization will also help strengthen AES Tietê Energia as a growth platform ANNUAL REPORT BNDES 2015 ANNUAL REPORT The study is available at www.bndes.gov.br/bndesfep. See details in “Project Highlights” in this section.

in the segment of power generation, Cabo Frio, Iguaba Grande and São Pedro Corporate Social Investment (ISE) line. providing alternatives for the expansion and da Aldeia, all located in the state of The project's goal is to offer professional diversification of the national power grid. Rio de Janeiro. This is the third loan training to 550 local students and qualify agreement concluded with the Prolagos 120 community leaders in public policy. Sanitation concessionaire. Investments supported so In 2015, a technical study report was far have contributed to raising the rate of Renewable energy published on the universalization of water supply from 30%, in 1998, to 93%, In the energy sector, especially with regard sanitation services in the state of Sergipe. in 2015, and complete the construction to sustainability, it is important to mention Supported by R$ 2 million in non- of the sanitation system in the region, our support for wind power, which played reimbursable funds from the Projects which currently treats 76% of effluent. a significant role in the projects portfolio Structuring Fund (BNDES FEP), the study The new project will provide greater in 2015, with an increase of over 80% in was developed in partnership with security to the system – which now operates the volume of disbursements compared Fundação Getulio Vargas (FGV). to its full capacity due to the region’s to the previous year. Regarding solar The project aimed to evaluate the economic strong growth – and enable the local energy, we took part in two auctions, feasibility and implementation of potential concessionaire to reach the set target which will result in an increase of 1,763 public-private partnerships, among other of 80% of treated sewage by 2018. MW in the national power grid. options, for the adequate provision In addition to the expanded coverage and Following the guidelines of the of sanitation services in the state. efficiency of water and sewage services, methodology for accreditation and survey of Also in that year we contracted a additional benefits will be provided to local wind turbine content, which R$ 295.6 million operation to finance the population, especially the cleanup aims to support the supply chain in the expansion works of water supply and of the Araruama Lagoon and the project wind power sector, in 2015 we developed sanitation systems in the municipalities "Producing the Future," conceived by the methodology for accreditation and of Armação dos Búzios, Arraial do Cabo, the concessionaire and supported by the survey of local content photovoltaic modules and systems in order to stimulate the development of a local supply chain for the sector and to encourage the creation of higher skills jobs. SERIES OF DISBURSEMENTS The methodology establishes specific rules TO WIND POWER The results of the methodology can for accreditation of equipment employing also be found in the details on wind photovoltaic technology, with required 2015 power in “Project Highlights”. 2013 progressive nationalization of specific 2014 components and processes throughout the implementation of the plan. In addition to these methodologies, still in

line with our aim to strengthen Brazilian 45 industrial suppliers, we have worked to formulate studies and develop new operations. In 2015, the corporate project R$ 3.6 R$ 3.4 R$ 6.1 related to the development of suppliers billion billion billion of goods and services afforded enhanced ANNUAL REPORT BNDES 2015 ANNUAL REPORT INFRASTRUCTURE: A DECISIVE SECTOR

See, for example, PDRS Xingu, reported in the subsection “Project Highlights”.

diagnosis and assessment of supply and Social development Development Bank (IDB), the partnership demand in the wind and solar energy We support projects that result in direct of Hospital do Subúrbio de Salvador (HS) chains, and identified opportunities impact on improving the living conditions was awarded second place in the category for operations with suppliers linked to of the population. Through studies and Improving the Delivery of Public Services hydroelectric generation and transmission. public-private partnerships (PPP), in Latin America and the Caribbean. In A further effort to expand the share we contribute to the implementation of four years of operation, this was the of renewable energy in the national essential services and projects that transform fourth international award received by power grid that can be highlighted is the reality of the supported communities. HS, which serves about one million people the investment in the production of gas We can highlight some PPP projects in the metropolitan region of the state obtained from the decomposition of organic in the health field from 2015. One is of Bahia and was the first hospital to waste in landfills (called biogas). In 2015 we the Imaging Diagnostic Center of Bahia, function by means of a PPP in Brazil. supported the construction of two biogas organized in partnership with the thermal plants. Implemented by the Solví International Finance Corporation (IFC). group, the Caieiras (São Paulo state) and This is a pioneering PPP, whose contract Usina Minas do Leão (Rio Grande do Sul has already been signed and which aims state) power plants, with 29.5 MW and to improve the quality and efficiency of 8.6 MW of installed capacity, respectively, telemedicine, diagnostics and bio-imaging received together R$ 100 million in support. services provided in the public state In terms of generation of energy, health network. Another project was a biogas stands out for at least three PPP tender to restructure the municipal advantages: generation close to places basic health network of Belo Horizonte, of consumption, with reduced loss in for which we developed feasibility transmission and distribution; use of an studies, also in partnership with IFC. alternative source, which contributes to The winning consortium will be responsible consolidate poorly exploited technology for investing up to R$ 407.7 million to and diversify the power grid; and build and equip up to 77 health centers, In financing infrastructure projects, reliable and stable generation, due to besides a sterilizing and laundry facility. we also seek to foster environmental low seasonality. This source also brings The concessionaire will explore, for a period sustainability and regional development benefits to the environment: the income of 20 years, non-essential services, such through the Corporate Social from the sale of biogas encourages as maintenance, cleaning and security. Investment (ISE) line. In 2015, for example, landfill owners to increase efficiency in In this context, it is also interesting to 55 social projects were approved, accounting exploiting and transporting the product; note the award received by a PPP supported for R$ 109 million financed for activities in and the introduction in the power by us at the United Nations Public Service the vicinities of the infrastructure projects. grid of a renewable source with zero Day and Awards (UNPSA 2015), organized

46 emission impact is positive from the point by the United Nations (UN). Structured in of view of the greenhouse effect. partnership with IFC and the Inter-American Learn more about the ISE line in the subsection “Social and environmental responsibility” in “Strategy and vision for the future”. ANNUAL REPORT BNDES 2015 ANNUAL REPORT environment innovation regional and PROJECT HIGHLIGHTS territorial development

WIND POWER

In 2015, 31 wind power projects started Support to the production chain Social impact operating commercially, adding 2,652 MW to It is also important to mention the good It is important to stress the regional and social the Brazilian installed capacity. Of this total, results of the current methodology for impact of these projects, since most of them 2,490 MW stem from projects we funded, accreditation and survey of local content are being implemented in the northeastern accounting for 94% of the total number related to wind turbines, which aims to semi-arid region, such as the west of Bahia, of electricity projects generated from this support the supply chain in the wind power Piauí, Ceará and Rio Grande do Norte states, source. Over the year we approved another sector. In 2015, all accredited manufacturers opening new prospects for generating 21 projects, totaling to over 2,612 MW. met the final nationalization requirements employment and income in these locations. provided in the methodology, initiating In addition, the financing operations use the manufacture of relevant parts and social sub-credit through the ISE line, which components, such as nacelles, generators, provides social and environmental investments inverters, large castings, among other in the environs of the power plants. 2005 previously imported equipment. In this context, we emphasize the Prominent in this context is our support coordinated action behind the development for the installation of three new plants and implementation of social projects in in intermediate links of the wind turbine some of the wind power projects of the industry, considered the most fragile and northeastern semi-arid area, contributing R$ potential bottlenecks of this productive chain. significantly to social sustainability in the In 2015, the new facilities of the companies region. Through the ISE line, we finance in 24.8 ST Metals, Iraeta and Engebasa started the municipalities of Trairi and Amontada, operating in the Suape Complex (Pernambuco in Ceará, a joint initiative of five companies billion financed state) and the municipalities of Jaguariúna involving projects of employment and income (São Paulo state) and Rio Grande (Rio Grande generation, professional training, health do Sul state), dedicated, respectively, to and sanitation geared towards the region’s machining and painting of large wind power less favored population. The joint initiative parts and components, the manufacture of avoids the overlapping of similar projects by flanges, and the production of steel towers. companies, therefore optimizing resources and Our support to the manufacturer expanding the scope of implemented activities. Vestas is also worth mentioning. Over 8,992 MW 17.8 million the period, the company completed the aggregated households required accreditation procedures under served the aforementioned methodology and built its nacelle and pipe assembly plant, besides completing the development and

accreditation of its suppliers of blades 47 and towers, and of all cube components and nacelle tables, which represents an effective gain for the national sector.

Osório wind farm (Rio Grande do Sul state) 2015 Photo: BNDES collection/Alexandre da Silva Pereira RELATÓRIO ANUAL BNDES 2015 RELATÓRIO INFRASTRUCTURE: A DECISIVE SECTOR

PROJECT HIGHLIGHTS

SOCIAL AND ENVIRONMENTAL SOCIAL MOBILITY RESPONSIBILITY: PDRS XINGU IN RIO DE JANEIRO

Worthy of notice is the Xingu Regional In urban mobility, prominent projects in 2015 Extension of the Porto Maravilha Sustainable Development Plan (PDRS), include those of the municipal government Expressway and construction of associated with the implementation of social of Rio de Janeiro that incorporate high the Transolímpica Expressway: and environmental programs of the Belo and medium-capacity transport systems, The first expressway, almost 7 km long, Monte Hydroelectric Plant. Established by as well as improvements in urban roads. should contribute to revitalize the port decree in 2010, the plan aims to promote These systems will contribute to improve district of Rio de Janeiro, attracting new public policies that result in improving the time and quality of trips within the residents and businesses to the area, the quality of life of the population in city and will also be important for mobility increasing tourism and appreciating its area of influence, which comprises during the 2016 Olympic Games. the historical and cultural heritage. 11 municipalities in the state of Pará. The investments that we supported in the The second, 13 km long, will halve travel time Between 2013 and 2014, with city totaled to approximately R$ 14.8 billion. between the neighborhoods of Deodoro funds from the Project Structuring Fund Although the city of Rio de Janeiro is mostly and Recreio and meet an expected (BNDES FEP), we elaborated, in partnership responsible for contracting the execution of demand of 110,000 passengers per day. with representatives of governments, works, some of them are responsibility of the non-governmental organizations, civil state government (as in the case of the Line 4 society and educational and research Subway) and the private sector (LRT Carioca). institutions, the Xingu Territorial Below are the major investments in the Development Agenda (ADT) in order city and what each one offers the population. to assist the PDRS Xingu Management Committee to foster opportunities for Transoeste BRT – Segment 0 and economic, social, environmental and connection between Transolímpica institutional development in the region. BRT and Transbrasil BRT: In order to implement the defined Construction of exclusive lanes for activities, the plan determines that the Light Rail Vehicle (LRT Carioca): articulated buses (BRT). The former, 6.4 km concessionaire of the Belo Monte plant, Norte Medium-capacity mode of transportation long, will halve travel time between the Energia S.A., must earmark R$ 250 million which will contribute to improve neighborhoods of Santa Cruz and Barra during the construction of the plant and mobility in the central and port district da Tijuca, meeting an expected demand R$ 250 million following its entry into operation. and to consolidate the concept of of 220,000 passengers per day. The latter, Similar to the other socioenvironmental integrated transport network. a road link between the Transolímpica investments made by Norte Energia, these BRT and Transbrasil BRT lanes, will also be resources are among the investments we integrated with the Supervia railway, thus financed for the construction of Belo Monte. improving urban mobility in the region. In December 2015, the concessionaire’s investments related to PDRS Xingu Duplication of Salvador Allende reached R$ 100 million in implemented Line 4 Subway: Avenue (Olympic Park area) and

48 activities and projects. Expansion of the subway network that duplication of Bandeiras Viaduct: will enable the daily withdrawal of The investments will enable the execution approximately 2,000 vehicles from the of urban adjustments in the Olympic Park streets, contributing to improve traffic area and better road infrastructure between The document outlining the Agenda was published in and reduce environmental pollution. the South Zone and Barra da Tijuca. 2015 and is available on www.bndes.br/bndesfep. RELATÓRIO ANUAL BNDES 2015 RELATÓRIO COMPETITIVENESS OF BRAZILIAN COMPANIES Access the BNDES Card website (www.cartaobndes.gov.br).

We believe it is essential to foster investments attractive conditions for exporters MSMEs that allow Brazilian companies to explore were added to an adverse international With regard to priority support for MSMEs, opportunities and overcome challenges in their macroeconomic environment, with strong emphasis goes to progress in the BNDES specific markets, enabling the competitive impact on trading partners and financing Innovative MSME program, with 66 development of the national economy. for the purchase of Brazilian goods and operations approved in 2015, reaching a services. In this context, our disbursements total of R$ 101.5 million. Prominent among Understanding the effect of credit for exports totaled to R$ 6.1 billion, sectors receiving investment is information restrictions, particularly for smaller a decrease of 34% compared to 2014. technology, with 31 approved operations. companies, due to the Brazilian economic However, some important advances The BNDES Card also showed very scenario in 2015, we maintained as in this modality of support can be significant figures, totaling to R$ 11.25 a priority the support to MSMEs. highlighted, such as the development of billion in disbursements at the end An instrument worth mentioning a specific credit line to support exports of 2015, a result similar to 2014. in this effort to support MSMEs is the of innovative companies. Another A novelty in 2015 was the accreditation BNDES ProBK Program, which has been positive highlight in 2015 is the BNDES of Banco do Nordeste (BNB), the tenth in operation for a year totaling R$ 230 Exim Automatic Line, of indirect support financial institution to issue the card. million in approved and contracted for exports. From its launch in 2010 to Still aiming to expand access to credit operations. Half of these operations December 2015, 114 operations were for MSMEs, self-employed truckers and are with MSMEs and over 70% with approved for fifty Brazilian exporters individual entrepreneurs, we operated new clients, which also shows the who sell their products in 13 countries by means of the Investment Guarantee commitment to diversify our portfolio. in Latin America and Africa. Fund (BNDES FGI), which complements Regarding exports, the year was the guarantees offered by companies challenging in the foreign front. which, for being smaller, often find Constraints in budget and funding to it difficult to meet the guarantee operate certain lines of credit at more requirements of financial institutions. In 2015, BNDES FGI contracted more than 2,700 operations, representing R$ 0.46 billion in funded amounts. Of this total, HIGHLIGHTS OF SUPPORT FOR INDUSTRY IN 2015 HIGHLIGHTS OF SUPPORT FOR EXPORTS IN 2015 (in R$ billion) (in R$ billion) 30% of disbursements were for companies from the North and Northeast Regions 4.1 (an increase of about 50% over the previous 5.6 1.0 0.5 year). Also in that year, 57% of BNDES 1.1 0.3 Innovative MSME operations were made possible by its guarantee. Also worthy of note is the launch of the Free Credit FGI,

a modality that supports financing operations 49 with funding sources other than BNDES. T A The first operations contracted in this modality were also for innovation projects.

* Manufacturing and assembly of vehicles, vessels, railway equipment and aircraft. ANNUAL REPORT BNDES 2015 ANNUAL REPORT COMPETITIVENESS OF BRAZILIAN COMPANIES

Capitals market In 2015, investments of approximately cultures. Forecast to start in 2016, Criatec Funds R$ 540 million were committed in five new the fund, managed by Inseed, will have investment funds in corporate shares, which a ten-year term and invest in innovative Criatec III is the third national fund focused on investments in seed capital that we command. were added to the portfolio of 33 investment companies with revenue up to R$ 12 million Launched in 2007, CRIATEC I features some success stories. funds with BNDESPAR participation. that operate primarily in the sectors of An example is Magnamed, a supported company that produces intelligent modules and high-precision These new funds, which also received information technology and communication, equipment for intensive care ventilators, neonatal R$ 6.2 billion from other investors, biotechnology, new materials, care and anesthesia equipment. In 2015, the company will enable capital injection in about nanotechnology and agribusiness. won the 2014 Successful Entrepreneur Award of the magazine Pequenas Empresas Grandes Negócios sixty companies over the following Also in 2015 we issued the Second (Small Companies Big Business), in the category High four years, making our fund’s portfolio Notice for Multi-Sector Funds, through Impact – Industry. Founded in 2005, in the incubator of the University of São Paulo (USP), the company the largest with regard to emerging which we received thirty proposals from began operating out of a garage, and currently, after technology companies in the country. managers, 17 of which were of venture investment by the fund, it acquired a 3,000 m² facility Prominent among these new funds capital, and 13 of private equity. in Cotia, in the São Paulo metropolitan area. In 2015, Dot Legend S.A., a startup from Rio de Janeiro is CRIATEC III, which aims to support the We expect to select up to five funds with that develops applications focused on purchasing, development of innovation ecosystems, products or sectors of activity preferably marketing and relationship for retail, was granted implement better governance and related to infrastructure, technological resources from the CRIATEC II fund (created in 2013) of R$ 2.5 million. Until 2015, CRIATEC II had already management practices, and disseminate base, education, health and creative approved five investments totaling to R$ 10.5 million. entrepreneurial and venture capital economy, besides social impact funds. Also in 2015, in recognition of the experience and results obtained by CRIATEC, we received the Best Practices Award from the Latin American Association of Development Financing Institutions (ALIDE) in the category of Financial Products.

Focus on the production chain the total amount of R$ 3.8 billion – Proengenharia is still considered the main We believe that the heating up of a of which R$ 3.4 billion went to support instrument to stimulate product development particular economic sector depends on the the construction of offshore support in the automotive sector, and it is estimated development of its entire production chain, vessels, as well as oil tankers and oil that currently at least 30% of light especially the suppliers of goods and services products in domestic shipyards, through vehicles sold in Brazil contain components that are necessary for the manufacture of resources of the Merchant Marine whose engineering we have financed. a given product. Therefore, in strategic Fund (FMM) – and R$ 370 million earmarked segments, we have worked to foster all to support the capital goods sector, Innovation in industry stages and actors involved in the production with emphasis on the production of subsea Confirming the priority given to supporting process, thus increasing the generation of and topside equipment for oil platforms. innovation, the financing of projects

50 benefits to society from a single sector. Engineering is also a key component to focused on the internet of things (IoT) In the oil and gas sector, for example, build a national and competitive industry, was a highlight of our performance in our support in 2015 included the entire especially for the automotive chain, whose 2015. Prominent in the production sector chain, from exploration and production investments in R&D are historically higher was the approval of two projects that to distribution, especially support for than the average of the manufacturing apply the internet of things to agriculture, shipbuilding. We disbursed over the year industry. Launched in 2007, BNDES developing national solutions for precision ANNUAL REPORT BNDES 2015 ANNUAL REPORT agriculture. In the context of intelligent Energia has the capacity to produce more implementing systems of electronic medical cities, in 2015 the Cittati Tecnologia project than 40 million liters of ethanol per year. records (e-SUS Atenção Básica) and risk was concluded, applying IoT to improve Production on such a scale brings classification (screening) in Primary Care the quality of life of the population. important gains in reducing pollutants, Units (PCU) in the city, reducing waiting The CittaMobi product, with information since the production of E2G, when time for care, consultations and exams. on bus schedules, is an application for compared to conventional ethanol, releases Carried out over 2015, the first mobile devices supported by a software up to 15 times less carbon dioxide into the phase was successfully completed with platform developed with our support and atmosphere. It is also estimated that, in a the systems installed in 16 PCUs and has accumulated 2.5 million downloads. few years, E2G will be able to reduce CO2 in two emergency rooms in the city, In the field of health, the first stage of emissions by more than 90% compared besides 667 health professionals trained, the strategy to support the development to gasoline, and may be competitive even complying with the budget of R$ 1.2 of the biotechnology industry in Brazil with oil prices below US$ 40 per barrel. million for this stage and improving the was concluded. Biotech drugs are the main Such potential has caught the attention quality of care to the population. focus of the pharmaceutical industry to of the organizers of the 21st Conference The project was presented as a address health needs which have not yet of the United Nations on Climate Change consideration for the financing approved been addressed, and represent six of the (COP21), held in 2015, in Paris, by the in 2014, through which approximately ten best-selling products in the world. United Nations (UN), which invited us to R$ 250 million were allocated for the In order to face the challenges of an present activities to foster this technology. construction of a Libbs factory to produce aging population and expand patients’ monoclonal antibodies, to be concluded access to expensive cancer treatments, Social responsibility in 2016. Biotech drugs produced in we approved the projects of the companies In the industrial sector, we also encourage this plant will be used to treat diseases Orygen and Bionovis, which aim to the adoption of socially responsible such as cancer, rheumatoid arthritis develop biosimilar drugs, inaugurating practices by supported enterprises, and other autoimmune diseases. in Brazil the production of drugs against through funds from the Corporate Social rheumatoid arthritis and cancer. Investment (ISE) line. In the paper and pulp sector, for example, the outlay for social Sustainability projects associated with financed projects With the goal of contributing to sustainable was R$ 50 million during the year, with development, we persisted in our priority support for income-generating programs, focus of supporting the development besides investments that contributed to of second-generation ethanol (E2G) mitigate the impact of implementing in the sugarcane industry. Developed industrial projects in less favored regions, in Brazil from sugarcane waste, E2G with significant labor displacement. allows a 50% increase of productivity A highlight in the pharmaceutical from the same acreage, thus avoiding sector is the action taken by the company deforestation to create new areas. Libbs in the municipality of Embu das In 2015, the first integrated unit Artes, in the metropolitan area of São

for the production of E2G on a world Paulo. Following a survey to measure 51 scale was inaugurated in Piracicaba (São popular satisfaction with the city’s public Paulo state). The project benefited from services, the first phase of the project "Time our financial support to the amount of is Health" was executed, in which the R$ 207.7, which was 90% of the total company, with our support, sponsored and investment. The enterprise of Raízen supervised the municipal government in ANNUAL REPORT BNDES 2015 ANNUAL REPORT RELATÓRIO ANUAL BNDES 2015 52 COMPETITIVENESS OFBRAZILIANCOMPANIES established withaforeigncorporation. by aBrazilianbiotechnologycompany licensing agreementforadrugcreated cells. Thisisthefirstintellectualproperty with virtuallynosideeffects tohealthy a drugthatattacksonlytumorcells, with atoxinofitsdevelopmenttoproduce Therapeutics, whichaimstocombineit to theAmericancompanyMersana the market.Theantibodywaslicensed drug thanthosecurrentlyavailableon creation ofamoreeffective anti-cancer monoclonal antibodythatallowsthe BNDESPAR in2012,hasdevelopeda Recepta, acompanyinvestedby FIGHTING CANCER partners ofSunew, witha30%share. and weexercisedthatright bybecoming in spin-offs resultingfromthatsupport, we wouldhavetheright to participate BNDES FUNTEC.Asdeterminedatthetime, previously supportedwithfundsfrom the appliedresearchcenterCSEMBrazil, exploiting thistechnology, developedby is aspin-off focusedoncommercially (organic photovoltaics).Thecompany energy, theso-calledOPVmodules converting solarenergyintoelectrical of organicplasticfilmscapable dedicated totheproductionandmarketing a shareholderofSunew, acompany In September2015,BNDESPAR became PHOTOVOLTAIC FILMS PROJECT HIGHLIGHTS

the localpopulation'squalityoflife. communities intheregionandimproving promoting thesustainabledevelopmentof sports andleisure.Theresourcesaimat related tosocialinclusion,agriculture, economy. In addition,thereareprojects income andstrengtheningthelocal enabling thegenerationofjobsand with trainingcoursesinentrepreneurship, to developruralandurbanenterprises investments. Themainsocialprojectsseek has R$15millioninsupportforsocial Amarante andCaucaia,inCeará,also the municipalitiesofSãoGonçalodo contributing toapositivetradebalance. production willbedestinedforexportation, steel platesperyearandalmosttheentire capacity toproducethreemilliontonsof domestic product(GDP).CSPwillhavethe with asignificantincreaseinstategross 4,000 directjobsand12,000indirectjobs, R$ 2.3billionofwhichcamefromBNDES. amounted toapproximatelyUS$5.5billion, construction inBrazil.Theinvestment one ofthelargestprivateenterprisesin Siderúrgica doPecémCompany(CSP), implement theprojectofCompanhia In 2015weprovidedfinancingto STEEL PRODUCTION The steelmillcomplex,locatedin The projectisestimatedtogenerate to theChinesecorporategroupHainan. export ofuptofortyEMBRAERaircraft (CEXIM) withtheaimoffinancing state bankExport-ImportBankofChina cooperation agreementwiththeChinese and Republic.Alsoin2015wesigneda US companiesAmericanAirlines,Skywest about ahundredaircraftacquiredbythe US$ 2.5billioninexportfinancing,for operations, totalingtoapproximately the approvalandcontractofthreenew of thecompany’s E-175models, with Brazilian brandinahigh-techindustry. previous one,reinforcingtheimageof even lessenvironmentalimpactthanthe The newfamilyofaircraftwillhave commercial aircraftwith61to120seats. as aworldleaderinthesegmentof contributing toconsolidatethecompany highlights ofoursupportforinnovation, commercial aircraftE2E-jetswasoneofthe generation ofEMBRAER’s familyof In 2015,thedevelopmentofsecond AIRCRAFT We alsocontinuedtosupportexports environment innovation regional and territorial development

INNOVATIVE MSME AUTOMOBILES COMPONENTS

In 2014, we contracted the first operation In April 2015 the Jeep Automotive Hub The Finame Components program helped with the company Catamoeda Pesquisa e was inaugurated in Goiana, the first STEMAC, a 100% national company, Desenvolvimento de Máquinas S.A., with industrial park of the automotive sector in to become the leader in the Brazilian the objective of developing a prototype the state of Pernambuco, which includes market of generator sets, competing with and pilot batch of the equipment the plant of Fiat Chrysler Automobiles leading multinationals of this market in "Catamoedas" (a machine that swaps coins (FCA), with a production capacity of other countries. In effect until 2015, the for coupons, e-coupons, points, or donation 250,000 units/year. The project, which program was created to finance technology to charities), designed to operate in small received funding to the amount of services or the acquisition of parts and establishments like drugstores, gas stations, R$ 3.27 billion, also includes the installation components produced in the country to be bakeries, snack bars, among others. of an engine plant, a testing facility, incorporated into machinery and equipment Due to the success of the equipment, and social investments to expand basic in production or development stages. in 2015 we approved financing for the health infrastructure for the community. The importance of the program as a financing production of a new product, also under The hub is estimated to generate strategy was also stressed during the 2015 the BNDES MSME Innovative program. 9,000 direct jobs, which will also include ABINEE/BNDES Cooperation Seminar, The company will develop "CataCash," a auto parts manufacturers, inducing as it allows the beneficiaries of funds to small, low-cost smart safe for small and the creation of a local supply chain. maintain stocks of critical items, reducing medium-sized retailers. The purpose of the manufacturing lead time, as well as offering device is to streamline the collection and different payment terms to their customers. security of banknotes in small establishments, as already occurs in larger enterprises.

CULTURAL REVITALIZATION

The opening of the Congonhas Museum of this technology in Brazil. Community (Minas Gerais state) in December 2015 participation was essential in the process is an example of how the revitalization of designing the museum and its activities. of historical heritage can foster local Residents were trained as monitors economic, social and cultural development. and artisans produced sawdust carpets,

This is an initiative supported by R$ 7.1 million biers, bead rosaries and banners, which 53 in non-reimbursable resources. will be sold as souvenirs. In addition to The museum’s collection includes simulating professional training and income copies of the 12 prophets sculpted by generation, this kind of participation the Brazilian artist Aleijadinho, molded contributes to preserve local traditions, through 3D scanning, the first application involving the community in the project. Foto: UNESCO Collection/Leo Lara ANNUAL REPORT BNDES 2015 ANNUAL REPORT SOCIAL AND PRODUCTION INCLUSION

We seek to participate directly in reducing technological innovation. An example of health, education and sports, justice, inequalities and in regional development support within Inova Agro in 2015 was the environment, and other areas linked through the production inclusion of individuals financing contract to implement a model to regional and social development. and legal entities engaged in micro and production center for beef cattle in the Besides supporting projects selected small entrepreneurial activities and state of Mato Grosso, in order to increase through public notices and those of low-income populations. productivity and profitability by area. continued support with fund resources, in 2015 we sponsored the BNDES Agriculture Social inclusion Award for Good Practices in Solidarity The support for family farming projects is We also support projects with Economy in order to recognize exemplary one of the highlights in democratizing access potential to generate jobs and income initiatives implemented with our to credit. In partnership with cooperative on a non-reimbursable basis. resources or those from other sources. banks, credit unions and other institutions, These resources are primarily earmarked The award acknowledged actions we develop projects to fight rural poverty for collective production projects that considered "best practices" by solidary and promote social and production inclusion promote regional and social development economic enterprises (SEE) and their of family farmers, medium-sized agricultural in all Brazilian regions. Initiatives can be networks, rewarding them with R$ 20,000 producers and land reform settlers. supported in agriculture, manufacturing, (for formally established SEEs or those In 2015, approximately R$ 15 billion trade and services. Many of them are not yet established) and R$ 50,000 (for were disbursed for both corporate and supported by the Social Fund, established SEE networks). SEEs could compete in family agriculture. Support for Cooperativa with part of BNDES’s annual profits, to the areas of solidary finance; solidary Central Aurora is an example of support for support social projects in the areas of production, marketing or consumption; the sector. The cooperative benefits about job and income creation, urban services, and training, education or culture. Thirty 70,000 family farmers who run small farms in established enterprises in 18 Brazilian western Santa Catarina. In the last six years states, eight non-established enterprises it received financing for several projects in eight different states, and ten networks that contributed to its growth, tripling in five regions of Brazil received awards. its income and increasing the number of Some of the awarded enterprises generated jobs from 11,500 to over 26,000. were Associação Art Gravatá (Pernambuco Also in 2015 we signed a technical state), composed of artisans who produce cooperation agreement to promote educational toys; Banco Comunitário cooperativism with the Organization of do Preventório (Rio de Janeiro state), Brazilian Cooperatives (OCB). Several which offers credit in social currency initiatives have already been carried for consumption, production credit and out, such as training on credit to state other services to the community; units, publication of interviews with Grupo Ecopapel (Rio Grande do Sul state),

54 our executives in the OCB media, and which works with recycling paper, offering preparation of a primer on rural credit. workshops and developing products; The Inova Agro and Inovagro programs and Rede Bodega (Ceará state), which currently stand among initiatives to organizes a set of fixed sites of collective foster competitiveness and productivity in commercialization, integrating family farming agribusiness and food production through production and handicraft in the region. ANNUAL REPORT BNDES 2015 ANNUAL REPORT environment regional and territorial PROJECT HIGHLIGHTS development

COOPERATIVISM SÃO PAULO SHOPPING CIRCUIT Microcredit Other highlights among our initiatives With resources from the Social Fund, The São Paulo Shopping Circuit to foster social and production inclusion we supported the credit union Cresol Baser project is an innovative example of is the results achieved by BNDES to expand credit cooperativism in socially conciliating urban organization and Microcredit product, with onlending vulnerable areas. Support from this the generation of jobs and income. operations to financing institutions financial agent enabled operations of the The project, which took five years to be and onlending agents, ensuring National Program for Strengthening Family structured, aims to give back to the population funding for the country's microcredit Agriculture (PRONAF) in regions that used of São Paulo a previously degraded urban institutions which, in turn, carry out to be unreached by public policies. space, retrieving the dignity of popular operations with microentrepreneurs. In partnership with the Land and Cartography trade on which a significant portion of the In 2015, the supported institutions – Institute of the state of Rio de Janeiro, we population depends, as well as small street Banco do Nordeste, the Development also supported agricultural settlements in vendor entrepreneurs and purchasers from Agency of the state of Santa Catarina, the state, enabling the construction of several states who frequent the site daily. and the civil society organizations barns and agricultural machinery and of public interest (OSCIP) CEAPE/SE equipment, benefiting 2,107 families. CISTERNS and BLUSOL – granted 150,000 loans Also by means of the Social Fund, to microenterprises or individuals groups of small farmers were able to access BNDES also supports the construction of cisterns and lent around R$ 707 million. institutional purchasing programs, in the semi-arid region with resources from increasing sales and the income of families. the Social Fund. In 2015, the construction of Sustainability The Cooperative of Ecological Producers of 20,000 tanks for food production – started The year of 2015 also marked the first the North Coast of Rio Grande do Sul and in the previous year – was concluded, and a activities of Capacita ABC, a technical Southern Santa Catarina (ECONATIVA), new contract provides for the construction training project developed by BNDES, for example, thanks to the purchase of of another 3,400 in 2016. The cisterns enable from a technical cooperation agreement refrigerators and other equipment, families to stock water and produce food with various public and private can now preserve produce for longer during drought spells for consumption and sale. entities, for analysts and designers periods and in better hygiene conditions. The cistern featured in the image of financial institutions that operate The image below features metal shelves below, in the region of Tejuçosa (Ceará state), the ABC Plan. The plan, created in acquired through the project. ensures the irrigation of crops. 2010 by the Federal Government to encourage the adoption of sustainable practices in the field, offers a line of credit with special conditions for the development of projects that adopt low carbon technologies. 55

Photo: BNDES Collection Photo: BNDES Collection/Rodrigo Almeida Aguiar ANNUAL REPORT BNDES 2015 ANNUAL REPORT GLOSSARY

BONDS INNOVATION ECOSYSTEMS SPREAD Government-issued debt instrument. Set of factors and agents that contribute Difference between the interest rate that a financial to innovation, such as universities, venture institution pays to raise funds and the interest rate it capitalists, researchers, technology charges to grant loan to individuals or legal entities. COMPLIANCE parks and business incubators. This financial margin varies from bank to bank and Adherence to standards, policies, is added to the usual interest rate charged for the guidelines and regulations. loan, since the spread value includes taxes and profit INVESTMENT FUNDS to be obtained by the institution in the operation. Corporate structures working as gated DEBENTURES communities, which aim to foster the collective Medium and long-term debt securities investment of the participants’ resources by TJLP issued by companies in which the debenture issuing quotas representing the equity. Such The Long-Term Interest Rate (TJLP) is determined holder becomes the company’s creditor. structures bring together investments from quarterly by the National Monetary Council and is several individuals and use them to invest in a reference to calculate interest on BNDES’ long- securities, normally stakes in companies. term financing. The TJLP was established in 1994 as FIXED INCOME the most attractive rate for long-term investments, Financial operations in which return is compared to other rates in the Brazilian economy. paid in accordance with set conditions, RISK CAPITAL such as government securities, savings, Investments to acquire equity in companies financing and simple debentures. with accelerated growth but that offer higher VARIABLE INCOME risk, with expectations for remuneration from Financial transactions involving securities in which dividends or capital gains due to the appreciation the return is not known at the time of investment. FOLLOW-ON of these assets from the time they were Primary or secondary public offering of acquired up to their effective divestment. shares by companies that have already issued VENTURE CAPITAL an initial public offering (IPO) of stock. Investment in MSEs already established SECURITIES and with high growth potential Any securities or investment contracts issued by FUNDING companies that generate the right to interest This is the mobilization of third-party (stakes), partnership or return, including those resources via the capitals market or resulting from rendering services, whose returns banking market with an amortization arise from the work of the entrepreneur or third period compatible with the maturity of the parties. For the issuer, securities are an alternative investment which is to be implemented. way to raise funds in relation to the traditional financing, while for the buyer they represent an investment with potential for returns higher IMPAIRMENT than fixed-income securities. Examples: stocks, Loss resulting from reduction in the debentures or quotas in investment funds. recoverable amount of an asset.

SEED CAPITAL INITIAL PUBLICOFFERING (IPO) Model of investment aimed at supporting More commonly known as the acronym companies and projects in the initial IPO, the initial public offering is the stage of operation, seeking to make first sale of a company’s shares on the their business model feasible.

56 stock exchange market, which marks its entry into the capital market. SPIN-OFF A company born from a research group of a company, university or public or private research center to explore a new product or high-tech service. ANNUAL REPORT BNDES 2015 ANNUAL REPORT Regarding GRI guidelines to report sustainability, in 2015 we initiated the use of the G4 GRI TABLE guidelines, migrating just a few indicators. OF INDICATORS

OCCURRENCE PAGE GRI INDICATOR DESCRIPTION IN THE REPORT

1 12 and 40 FS02 Procedures to assess and categorize social and environmental risks in business lines.

2 13 and 40 FS01 Policies with specific social and environmental components applied to business lines.

3 19 and 38 FS06 Percentage of the business lines portfolio per specific region, per size (i.e. micro/small and medium/large), and per sector.

4 19 and 41 FS07 Monetary value of products and services created to provide specific social benefits for each business line, shown per purpose.

5 19 and 41 FS08 Monetary value of products and services created to provide a specific environmental benefit for each business line, shown per purpose.

6 21 EC01 Direct economic value generated and distributed, including revenue, operational costs, employee remuneration, donations and other investments in the community, accumulated profit and payments to capital providers and governments.

7 41 and 42 FS05 Interaction with clients, investors and commercial partners in relation to risks, as well as social and environmental opportunities.

8 42 EN05 Energy saved due to improvements in conservation and efficiency.

9 42 EN08 Total water withdrawn per source.

10 42 EN02 Percentage of recycling-derived materials used.

11 42 EN22 Total weight of residues per type and disposal method.

12 28 LA11 Programs to manage competence and continuous learning that foster the continuing employability of staff members and to oversee staff members in the final days of their careers.

13 29 LA10 | G4-LA9 Average of training hours per year, per employee, shown per employee category and gender.

14 28 and 29 LA13 Breakdown of groups responsible for corporate governance and employees per category, listed per gender, age, minorities and other diversity indicators.

15 29 LA07 | G4-LA6 Rates for injury, occupational diseases, days lost, absenteeism and deaths related to work, per region

16 28 LA02 | G4-LA1 Total number and turnover rate per employee, age, gender and region.

17 28 and 29 LA09 Topics related to health and safety covered by formal agreements with trade unions.

18 28 LA04 | G4-11 Percentage of employees covered by collective bargaining agreements.

19 28 G4-55 Ratio of the percentage increase of the total annual remuneration of the highest paid individual of the organization in each country where it has significant operations and the average percentage increase of the total annual remuneration

of all employees (excluding the highest paid) in the same country. 57 20 28 G4-LA3 Rates of return to work and retention following a maternity/paternity leave, shown down by gender. 21 29 G4-LA7 | G4-LA8 Existence of employees/outsourced workers involved in occupational activities that have a high incidence or high risk of specific diseases. ANNUAL REPORT BNDES 2015 ANNUAL REPORT CREDITS

Positions occupied on December 31, 2015

President of the Republic Head of the President’s Office Board of Directors Dilma Rousseff Sergio Gusmão Suchodolski Director-general Deputy Managing Directors Luciano Coutinho Minister of Development, Industry Álvaro Oliveira de Freitas and Foreign Trade Ana Christina Moreno Maia Barbosa Deputy Director-general Armando Monteiro Caio Marcelo de Medeiros Melo Wagner Bittencourt de Oliveira Carlos Renato Pereira Cotovio Carlos Roberto Lopes Haude Managing Directors BNDES Claudia Pimentel Trindade Prates Roberto Zurli Machado Claudio Figueiredo Coelho Leal Luciene Ferreira Monteiro Machado (interim) Advisory Board Fatima Regina França Farah Maurício Borges Lemos Fernando Pimentel Puga Julio Cesar Maciel Ramundo President Gabriel Rangel Visconti José Henrique Paim Fernandes Fernando de Magalhães Furlan Henrique Amarante da Costa Pinto Fernando Marques dos Santos Juliana Santos da Cruz João Carlos Ferraz Vice-president Luciana Giuliani de Oliveira Reis Luciano Coutinho Luiz Antonio do Souto Gonçalves Marcelo Porteiro Cardoso FINAME Advisory Board members Mauricio dos Santos Neves Board of Directors Vagner Freitas de Moraes Mauricio Elias Chacur José Constantino de Bastos Junior Nelson Fontes Siffert Filho President José Eduardo Martins Cardozo Raquel Batissaco Duarte (interim) Luciano Coutinho José Aldo Rebelo Figueiredo Ricardo Luiz de Souza Ramos Genildo Lins de Albuquerque Neto Rodrigo Matos Huet de Bacellar Deputy Director-general Miguel Soldatelli Rossetto Selmo Aronovich Maurício Borges Lemos Dyogo Henrique de Oliveira Sérgio Foldes Guimarães Mauro Luiz Iecker Vieira Managing Directors William George Lopes Saab Head of the Auditing Division Wagner Bittencourt de Oliveira Roberto Ângela Silva Fernandes Zurli Machado Fiscal Council Luciene Ferreira Monteiro Machado (interim) Marco Antonio de Oliveira BNDESPAR Julio Cesar Maciel Ramundo Jaime Silva Herzog José Henrique Paim Fernandes Paulo Fontoura Valle Advisory Board Fernando Marques dos Santos Francisco Arruda Vieira de Melo Filho (alternate) João Carlos Ferraz Fernando de Magalhães Furlan Hailton Madureira de Almeida (alternate) Luciano Coutinho Marcelo Maia Tavares de Araujo Advisory Board Auditing Committee Marcos Vinicius de Souza Maurício Borges Lemos Eustáquio Coelho Lott Daniel Marteleto Godinho Luciano Coutinho Attilio Guaspari Carlos Augusto Grabois Gadelha Paulo Roberto Vales de Souza Fiscal Council João Alberto de Negri Márcio Leão Coelho Líscio Fábio de Brasil Camargo Board of Directors Esther Dweck Claudio Azevedo Costa Carlos Buch Pastoriza President Cláudio de Almeida Neves Vinícius Mendonça Neiva (alternate) Luciano Coutinho Germano de Oliveira Farias (alternate) Fiscal Council Vice-president Gustavo Saboia Fontenele e Silva José Eduardo Guimarães Barros Wagner Bittencourt de Oliveira Paula Bicudo de Castro Magalhães Managing Directors Manoel Augusto Cardoso de Fonseca (alternate) Poliana da Cruz Ramos (alternate) 58 Roberto Zurli Machado Roberta Moreira da Costa Bernardi Pereira (alternate) Luciene Ferreira Monteiro Machado (interim) Maurício Borges Lemos Julio Cesar Maciel Ramundo José Henrique Paim Fernandes Fernando Marques dos Santos João Carlos Ferraz ANNUAL REPORT BNDES 2015 ANNUAL REPORT TELEPHONE NUMBERS AND ADDRESSES

BNDES – Brazilian Development Bank Offices Rio de Janeiro Business Building Brasília London Av. República do Chile, 100 | Centro Centro Empresarial Parque Cidade BNDES PLC 20031-917 | Rio de Janeiro | RJ Setor Comercial Sul – SCS 6-8 Tokenhouse Yard | 4th floor Quadra 9 | Torre C | 12° andar EC2R 7AS | London | United Kingdom Ventura Corporate Towers Building 70308-200 | Brasília | DF Tel.: +44 20 7151 3650 | Fax: +44 20 7151 3674 Av. República do Chile, 330 | Centro Tel.: +55 61 3204 5600 | Fax: +55 61 3204 5635 [email protected] 20031-170 | Rio de Janeiro | RJ São Paulo Montevideo BNDES Call Center Av. Presidente Juscelino Kubitschek, 510 BNDES América Latina y el Caribe +55 0800 702 6337 5º andar | Vila Nova Conceição Avenida Luis Alberto de Herrera, 1.248 www.bndes.gov.br/faleconosco 04543-906 | São Paulo | SP Torre II | 3º piso Tel.: +55 11 3512 5100 | Fax: +55 11 3512 5199 World Trade Center Montevideo Ombudsperson’s Office 11300 | Montevideo | Uruguay +55 0800 702 6307 Recife Tel.: +598 2622 8875 Fax: + 55 21 2172 7117 Rua Padre Carapuceiro, 858 | 18º e 19º andares [email protected] Post Office Box: 15054 Centro Empresarial Queiroz Galvão 20031-120 | Rio de Janeiro | RJ Torre Cícero Dias | Boa Viagem Johannesburg www.bndes.gov.br/contactus 51020-280 | Recife | PE BNDES Africa Tel.: +55 81 2127 5800 | Fax: +55 81 2127 5806 Illovo Edge Office Park Building 1, 4th floor Belém Cnr Fricker & Harries Road | Illovo | Sandton Avenida Governador José Malcher, 168 | sala 115 2196 | Johannesburg | South Africa Centro Empresarial Bolonha | Nazaré Tel.: +27 (0) 11 243 5200 66035-065 | Belém | Pará Fax: +27 (0) 11 243 5201 | +27 (0) 11 243 5202 Tel.: +55 91 3110 2033 [email protected] 59 ANNUAL REPORT BNDES 2015 ANNUAL REPORT Content management BNDES Planning Department Claudio Figueiredo Coelho Leal Flavia Campos Kickinger Heloisa Rizzo Amambahy Santos

Editing President’s Office of the BNDES Publicity Department Editorial coordination Camila Braga Medina

Editorial concept and content editing Camila Braga Medina Fernanda Costa e Silva Luisa de Carvalho e Silva

Graphic design and layout Refinaria Design

English translation Tikinet

Translation review and proofreading Expressão Editorial

EDITED BY THE COMMUNICATION DEPARTMENT JUNE 2016

MINISTRY OF PLANNING, DEVELOPMENT AND MANAGEMENT