Brazil announces $17 billion fund to drive defence and technology industries

Brazil has launched a USD16.7 billion scheme to drive development in high-tech industries including defence and space, with an emphasis on industries developing military command and control technologies; satellites; and space propulsion systems.

The Inova Empresa (Company Innovation) plan - launched by President Dilma Rousseff on 14 March - includes a combination of state venture capital and subsidised loans.

The fund comprises USD609 million in economic subsidies for businesses; USD2.1 billion to fund partnerships between companies and research bodies; USD1.1 billion for government equity stakes in technology companies; and USD10.6 billion for loans that will offered at rates of between 2.5% and 5%.

As well as defence and space industries, the fund will be available to corporations active in health; IT; and environmental sustainability sectors.

The fund is the latest in a series of high-profile measures by Brazil to drive the capabilities and competiveness of high-tech sectors such as defence.

In 2012 Brazil activated Law 12.598, which allowed eligible national defence companies to benefit from substantial tax breaks of up to five years and export credit guarantees. The benefits are only available to companies majority owned by Brazilian individuals or organisations.