(Bloomberg) — Brazil President Luiz Inacio Lula da Silva said the government would help victims of blackouts that have darkened Sao Paulo due to heavy rains, promising assistance to businesses and residents who lost power for more than 24 hours.
About 250,000 small businesses will be eligible for credit under a plan Lula and Finance Minister Fernando Haddad initially outlined Friday, the president said during a live broadcast Saturday.
But Lula added that he also wanted to provide assistance to 850,000 people who went without power for extended periods, saying his government would give Sao Paulo the kind of help it offered to Rio Grande do Sul after record floods battered the southern state earlier this year.
“There are 850,000 people who had power outages for more 24 hours,” Lula said. “This ruined the things they had in the house. So we have to create conditions to help these people buy what they lost.”
He didn’t provide additional details on the proposed assistance to individuals.
Haddad told reporters Friday that the government would use 150 million reais ($26.3 million) in existing funds to extend credit only to micro and small businesses affected by the blackouts. The resources will come from Brazil’s operations guarantee fund and have no primary fiscal impact or effect on public spending rules, Haddad said.
Investors are closely scrutinizing Brazil’s public spending, with mounting concerns about the government’s commitment to fiscal balance weighing on assets and the country’s currency this year.
–With assistance from Martha Beck.
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