China Development Bank provides USD 12 million loan to XCMG Brazil

In June 2018, China Development Bank (CDB) provided a USD 12 million loan to XCMG Brasil Industria Ltda., the Brazilian branch of the Chinese state-owned construction equipment company, Xuzhou Construction Machinery Group (XCMG). The loan's borrowing terms and purpose are unclear. The Brazil Central Bank lists the loan registration (ID TA832666) as complete. Also in June 2018, CDB provided a separate USD 10 million loan to XCMG Brazil (see Project ID #60507). On October 23, 2019, the Central Bank of Brazil officially authorized XCMG Group to establish XCMG Brazil Bank (XCMG Banco Brasil). The purpose of this bank was to compete with BNDES in the financing and supplying of industrial and agricultural equipment. They are the first financial institution with 100% foreign capital to obtain authorization from the Central Bank to operate in Brazil. On July 1, 2020, XCMG Bank officially started operations and CDB's Chief Representative of the Rio office attended the ceremony. It is unclear whether the 2018 CDB loan was used as seed capital for establishing this bank. XCMG Banco offers direct consumer credit, working capital and prepayment receivables, bank deposit certificates, foreign exchange, hedge operations, treasury and investment products, and credit lines for machinery and equipment financing. In November 2020, they closed their first loan agreement worth BRL 19 million with Zocar Rio Caminhões.

Additional details

No sources explicitly state that the purpose of this CDB loan was to serve as seed capital for XCMG Group to help open up their new financial arm, XCMG Banco. However, this may be reasonable to assume based on the timeline.

Number of official sources

1

Number of total sources

6