1. Perspectives for the Brazilian Economy and the Role of BNDES Andre Carvalhal Head of International Capital Markets June 2010 – São Paulo

2. BNDES Highlights  Founded on June 20th, 1952  100% state-owned company  Key instrument for implementation of Federal Government’s industrial and infrastructure policies  Support to micro, small and medium-sized companies  Main provider of long-term financing in Brazil  Emphasis on financing investment projects  EXIM activities  Equity investor through BNDESPAR

3. Finances long-term investments Equity Participation BNDES BNDESPAR Internationalization of Brazilian companies BNDES Limited Group Structure Finances capital goods production and purchases FINAME As of Dec 31, 2009 Consolidated Assets R$ 386.6 billion US$ 222.0 billion

4. Financing of: Complete business projects Export of goods and services Machinery and equipment Equity Investment Stocks and debentures Venture Capital Seed Capital Funds Private Equity Funds Main Instruments

5. BNDES vs. Multilateral Banks IDB = Inter-American Development Bank IBRD = The International Bank for Reconstruction and Development (World Bank) (*) Unlike other institutions, 12-month fiscal year ends June 30th CAF = Corporación Andina de Fomento Capitalization = Shareholders’ Equity / Total Assets ROA = Return On average Assets ROE = Return On average Equity

6. Perspectives for the Brazilian Economy The Brazilian economy can grow much faster than the average in developed countries Investments will be driven by four main sectors: oil & gas, electric power, logistics and housing Opportunities for intensive strategies in innovation and social and environmental sustainability Main challenges: increase aggregate investment/GDP rate, and boost competitive progress in the manufacturing industry

7. GDP may grow 5% p.a. in the 2010-2014 period Source: IBGE. GDP: Annual Real Variation (%) * 2009 and Avg 2010-14: BNDES' Forecasts. Sources: IBGE and BNDES. *

8. Investment has strong growth path Source: BNDES. Elaborated by: APE/BNDES Forecast of Investment Ratio 2009-2012 (% of GDP)

9. BNDES was responsible for 37% of total credit increase since sep/08 Source: BNDES. *considering the average exchange rate for each year BNDES Approvals and Disbursements 1 (US$ billion) *last 12 months up to January 2010

10. Disbursements by Business Sector

11. 2009 Operations Exchanged to US dollar on disbursement date US$ 72 billion Number of Operations 390,729 Disbursements micro and small individuals large other medium Petrobras

12. Equity Investment Portfolio Equity investments: evaluation uses lowest value among acquisition cost or market value Market appreciation valued at US$ 53 billion as of Dec 31st, 2009 StockBook Value Market ValueProfit Eletrobrás 2,483 4,3221,839 Vale 2,131 7,8575,726 Petrobras 676 14,41013,734 Other listed companies10,123 17,6867,563 Investment in unlisted companies * 4,008 9,0765,068 Total19,421 53,35133,930 (*) estimated value based on projections of economic value US$ million

13. Investment Outlook: Positive Prospects US$/R$ = 1.80 Source: BNDES Forecast

14. Sectors US$ billionGrowth 2005-20082010-2013% year Electric Power38516.4 Telecom37 0.2 Sanitation122211.7 Railroads91613.2 Roads23337.8 Ports51422.9 Infra1111526.5 Investments in Infrastructure were not affected by the crisis Source: BNDES

15. Investment in Industry: Domestic-led sectors have already recovered from the crisis Sectors US$ billionGrowth 2005-20082010-2013 % year Oil and Gas1121718.8 Mining2925(3.1) Steel15205.7 Petrochemical51728.9 Vehicles12177.3 Electronics8126.7 Pulp & Paper10 0.5 Industry1912717.3 Source: BNDES

16. Challenges for Infrastructure PAC (Growth Acceleration Program) 2014 World Cup 2016 World Olympics Pre-salt Environmentally sustainable projects

17. Focus on infrastructure: PAC (Growth Acceleration Program ) BRAZIL AGENDA PAC Program Source: Presidency of Republic (www.pac.gov.br) FX: 1.7412 (Dec.09) PAC Investments: 2007 - 2010 US$ billion% of Share ENERGY: 157.855 SOCIAL & URBAN:98.134 LOGISTICS:33.512 TOTAL289.4100.0  ENERGY  Electric Energy - Generation - Transmission - Distribution  Oil & Gas  Renewable Energy  LOGISTICS  Highways  Railroads  Ports  Airports  Waterways  Merchant Marine  SOCIAL & URBAN  Electricity for Everyone  Sanitation  Urbanization  Subways  Water Resources

18. 18 Disbursements by Region BNDES is an Important Supporter of PAC % of Share 73.4 6.5 20.1 100.0 BNDES in PAC 327 projects: - Supported Projects: US$ 57.3 Bn - Eligible Projects: US$ 13.1 Bn 17 Prospective Projects: US$ 6.7 Bn FX: 1.7306 (Apr.10) BNDES Portfolio in PAC US$ billion% of Share ENERGY: 56.573.4 SOCIAL & URBAN: 5.0 6.5 LOGISTICS:15.520.1 TOTAL77.0100.0

19. US$ 883.3 billion in investments as of 2011:  US$ 532.7 billion in the 2011-2014 period and US$ 350.9 billion after 2014: US$ 633.3 billion for energy US$ 60.5 billion in transport, including railways and the High-speed Train (TAV) Assorted social investments:  US$ 10 billion in urban mobility  US$ 12,8 billion in the Citizen’s Community program  My House, My Life (MHML)  goal of 2 million homes  Other programs include A Better City, Water for Everyone and Electricity for Everyone US$/R$ = 1.80 PAC 2

20. 2014 World Cup For the 2014 World Cup, FIFA requires investments to the tune of US$ 6.4 billion BNDES ProCopa Programs Arenas  Up to US$ 2.7 billion to build and remodel stadiums and urbanization investments in surrounding areas. Tourism  Up to US$ 556 million to build, remodel, expand and modernize hotels. US$/R$ = 1.80

21. Brazil has a great opportunity to improve its urban infrastructure and generate employment Investment in: transport, urban mobility, hotels, tourism, communications, security, stadiums and electric energy: US$ 16 billion in investments in the Olympics will produce an impact US$ 56.8 billion by the end of 2027* All these investments will have relevant impacts on a wide array of production chains as well as on the expectations of the private sector. *government’s forecast US$/R$ = 1.80 2016 Olympics

22. Pre-salt - Great opportunity for Brazil: growing long-term demand for the complex goods and services supply industry Strategic goals for the goods and services supply industry:  Competitive and sustainable expansion of its supply capacity  Developing higher aggregate value segments  Generating higher-skilled employment  Maintaining the steady increase in local goods & services Pre-salt The BNDES will foster investments throughout the entire oil and gas production chain, aiming at building a competitive global supplier of goods and services in the Oil & Gas sector.

23. Impacts from Petrobras investments on the production chain (2009-2013) US$ 111.6 bn in investments may generate industrial production of almost US$ 202.2 billion Total investments represent 22% of the pre-salt. Therefore, such impacts are still underestimated and have room for growth. Source: Petrobrás and IBGE. Elaborated: APE/BNDES US$/R$ = 1.80

24. Brazil’s Long Term Challenges Resume and qualify long-term planning (energy, logistics, environment, IT infrastructure,...) Promote and stimulate domestic savings in order to provide long-term funds for investment (banks and capital market) Develop capacity for innovation and competitiveness in the manufacturing industry, and promote global presence of Brazilian companies (vs. significant challenge due to exchange rate appreciation) Increase opportunities for social mobility (job expansion, development/improvement in education) and reduction of the inequality in income distribution Promote innovation and development of renewable energy sources The Brazilian Government, specifically the BNDES, is committed to supporting investments, particularly in energy and infrastructure

25. Thank you! Brazilian Development Bank - BNDES To contact us: www.bndes.gov.br/english/