Brazilian Army seeks to establish firm to help finance modernisation

IDV has delivered the first two Centauro IIs to the Brazilian Army, which are to be tested through the end of 2024. The acquisition of 98 Centauro IIs is one of the army's largest modernisation projects. (IDV)

The Brazilian Army wants to set up a state-owned company to help finance its modernisation projects.

The Secretariat General of the Ministry of Defence and the Army High Staff signed a letter of intent on 18 November initiating studies to create ENDEFORTE (Empresa Nacional de Desenvolvimento da Força Terrestre, National Land Force Development Company).

The proposal will still need to be approved by the Brazilian National Congress.

The letter of intent follows an ordinance published in March 2024 by the Army High Staff, which provides guidelines for the implementation of ENDEFORTE.

The company would be responsible for financing projects aligned with the army's strategic modernisation programmes, enabling new sources of funding without being bound by budgetary limits established by the annual federal budget law.

The goal is to expand the financing capacity for modernisation programmes, systems acquisition, and the development of long-term projects, the army said.

Since ENDEFORTE is intended to finance projects with funds outside of the annual federal budget, it will likely benefit from some of the BRL30 billion (USD5.6 billion) funding recently approved by the National Congress and federal government for armed forces modernisation.

This additional funding will be allocated at a rate of BRL5 billion per year over six years, starting in 2026.

The Army Projects Office manages 13 strategic modernisation programmes to strengthen operational capabilities and support the Brazilian defence industrial base.