Manaus R$620MM Loan Unblocked by Law Change; $BBAS3 Lender

The Bottom Line

• Manaus City Council approved a law amendment to resolve National Treasury Secretariat (STN) objections, unblocking a R$620 million loan.
• The financing, guaranteed by the Union and provided by Banco do Brasil ($BBAS3), targets public debt amortization and urban infrastructure investments.
• The legislative change addresses STN's concern over municipal laws allowing direct bank debits from city accounts, clearing a key hurdle for federal guarantee.

Manaus Unblocks R$620 Million Loan with Legislative Amendment

The Manaus City Council on Monday, April 27, 2026, approved an urgent bill to amend municipal legislation governing mayoral loans. This legislative action directly addresses irregularities identified by the National Treasury Secretariat (STN), which had previously halted the analysis of a R$620 million financing request. The vote, held at the municipal legislative headquarters, aims to unblock the operation, which carries a guarantee from the federal government (União).

The bill, submitted by Manaus Mayor Renato Júnior (Avante) on the same day, proposes modifications to Municipal Law No. 3.478/2025. This existing law had already authorized the municipality to contract up to R$2.5 billion in loans. The pivotal change involves the revocation of an article that permitted financial institutions to directly debit funds from the city's accounts. According to the STN, municipal legislation cannot grant financial institutions such authority for such operations. The federal body further stipulated that municipal laws should authorize the Executive Power, not banks, and prevent debt collection from accounts not explicitly designated in the contract.

Loan Purpose and Financial Terms

The R$620 million loan, to be contracted with Banco do Brasil ($BBAS3), is justified by the Manaus Prefecture as necessary for public debt amortization and significant infrastructure investments within the Amazonian capital. This request follows an earlier R$650 million proposal that the STN archived on April 9, three days prior to the new, slightly reduced R$620 million submission. Federal government authorization is crucial as the Union acts as the guarantor for the operation, without which funds cannot be released.

Technical documentation indicates that the funds will be allocated across several key areas. Approximately R$585 million is earmarked for urban infrastructure projects, with a focus on mobility, drainage, erosion containment, and broader urbanization initiatives. The remaining R$35 million is designated for the modernization of the Municipal Finance Secretariat, including unit restructuring and equipment acquisition. The loan carries a repayment term of up to 10 years, with a one-year grace period. The interest rate is structured around the CDI (Certificado de Depósito Interbancário), augmented by approximately 1.2% annually. Projections suggest the total cost of the operation, inclusive of interest and charges, could exceed R$1 billion over the full repayment period.

Legislative Process and Political Discourse

The expedited legislative process drew attention and generated tension between allied and opposition council members. During the debate, Councilman Coronel Rosses (PL) criticized the lack of detailed information regarding the specific allocation of the R$620 million. He questioned the general forecast of infrastructure investments without explicit project specifications within the bill text. "There is no way to specify where this money will go, no way to say. Personnel from the infrastructure secretariat will not say where it will go, and once again they are trying to rush it through. Let's have a little patience and reasonableness," Rosses stated.

Conversely, Councilman Gilmar Nascimento (Avante), a member of the mayor's allied base, clarified that the measure does not constitute a new loan but rather an adjustment to existing legislation previously approved by the City Council. "This house already authorized it in April 2025. We are amending the law; it is not a new loan," Nascimento affirmed. Following its approval by the Manaus City Council, the project now proceeds to the federal government for review. This federal assessment is a mandatory step for the prefecture to secure the Union's guarantee and finalize the financing agreement with Banco do Brasil ($BBAS3).