Angola's agreement with Brazil to maintain funding – The Economic Journal

Angola's agreement with Brazil to maintain funding - The Economic Journal

The Angolan government has committed to deliver to Brazil the equivalent of 20,000 barrels per day of crude oil in the context of the negotiation of a new line of financing and Brazilian credit insurance for exports of US $ 2 billion.

A protocol of understanding initialed between the two governments and published by presidential decree in Angola this month, establishing the "criteria for the concession" to Angola of a coverage of the Export Credit Insurance (SCE), within the framework of the Export Guarantee Fund (FGE), and with the support of "equalization of interest rates with resources from the Export Financing Program (Proex)," the document said, which Lusa has had access to.

Specifically, the new agreement provides for an additional "exposure" of the Brazilian State, of 2 billion dollars (1,720 million euros), to guarantee the insurance of the financing of exports of goods and services from Brazil to Angola.

"It will be up to the Government of Angola to indicate the operations that will be analyzed by the Brazilian Government," said the same document, adding that also the bank financing for these exports will be guaranteed "under specific financial conditions."

By contrast, according to the agreement, "the Republic of Angola undertakes to maintain the financial flow relative to the annual supply of 20,000 barrels / day of crude oil, distributed in a cargo, preferably every 45 days, making up two quarterly shipments" .

The return of these deliveries will be managed by Banco do Brasil, as agent of the Federative Republic of Brazil, and will be used in the "amortization" of the Angolan debt due, in the constitution of deposits for the amortization of maturing debt, be returned to Angola for the free use of resources by the Government of that country. "

Angolan oil production rose in September to 57,000 barrels a day from August, remaining the second largest African producer behind Nigeria, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).

According to the latest OPEC monthly report, Angola reached a daily production of 1.519 million barrels of crude in September, compared to 1.462 million the previous month, with data based on secondary sources from the organization.

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