Brazil's Maranhão state to advance fiscal sustainability with IDB loan

The Board of Executive Directors of the Inter-American Development Bank (IDB) approved a $52.9 million loan for the state of Maranhão in Brazil to strengthen fiscal revenue and public expenditure management, according to a press release issued by the IDB on May 26, 2026. The financing was confirmed in Washington and is designed to modernize the state’s fiscal management. It aligns local systems and processes with Brazil’s consumption tax reform. The operation also aims to enhance the state’s ability to deliver services. Ultimately, it seeks to support sustainable economic and social development in Maranhão.

The approved operation forms part of the third phase of the PROFISCO Program, a national IDB-supported initiative. PROFISCO is designed to strengthen fiscal sustainability at the subnational level in Brazil. It engages state governments in modernizing tax and expenditure systems. The program connects local fiscal frameworks with broader national reforms. Maranhão joins this effort under the latest phase of the initiative.

The program will finance measures to strengthen fiscal governance, modernize technology and operational processes, and build institutional capacity. It will improve cybersecurity, procurement and logistics, and promote transparency and fiscal citizenship, with a strong focus on inclusion. Additional measures will strengthen taxpayer registration, enforcement, and disputes resolution. The plan will also improve budget and financial management. Systems to manage fiscal risks and recover public revenues will be reinforced.

These efforts are expected to facilitate tax compliance while increasing transparency. They are intended to enable higher-quality public spending. The measures should ultimately support better public services for the population of Maranhão. The combined focus links revenue strengthening with expenditure modernization. Inclusion remains a core element of the program’s design.

The loan carries a 24-year maturity and a six-year grace period. Its interest rate is based on SOFR. Counterpart financing totals $5.9 million. The financial structure underpins the long-term scope of the modernization plan. Together, these terms establish the framework for Maranhão’s fiscal reform under PROFISCO.