OREANDA-NEWS. The Inter-American Development Bank (IDB) has approved \\$150 million in financing for the third phase of a program to increase the fiscal autonomy of approximately 18 municipalities in Brazil by modernizing their administrative, fiscal, financial and patrimonial management. 

The challenge faced by the National Program to Support the Administrative and Fiscal Management of Brazilian Municipalities (PNAFM in Portuguese) is to expand the institutional capacity of the municipalities to increase their tax revenues and improve the administration of public spending, thereby reducing their dependence on transfers from outside and increasing their autonomy as well as guaranteeing that the additional revenues generated are administered in an efficient manner. 

This project will benefit municipal governments by improving the collection of revenues and making possible the implementation of public policies at the municipal level. At the same time, it will benefit the population through the expansion of the services provided by the municipal governments. It will be carried out by the federal government at the national level and by the municipal governments at the local levels. 

“The goal of this project is to secure the fiscal strengthening of Brazil by making good use of revenues and improving the management of expenditures so that these resources are used for the country in an efficient manner,” said Luiz Villela, IDB project team leader. 

The program will provide municipal teams with training and technical assistance for the preparation, execution and supervision of projects developed using the System for Development, Execution, Monitoring and Supervision of Projects and approved by the Program Coordination Unit. The project also will strengthen planning and a results-based management model and will develop fiscal and economic studies, a cadastral valuation for urban and rural lands and the automation of the process for revenue collection, administrative fees, controls, financial intelligence and litigation. 

The new loan was approved for 24 years, with a grace period of 6.5 years and an interest rate based on LIBOR.