Report: Brazil Plans Emergency Funds for Rio Ahead of Olympics

The Brazilian government plans to transfer 2.9 billion reais ($849 million) in emergency funds to the state of Rio de Janeiro to pay for infrastructure and security during the Olympic Games, a government official told Reuters on Saturday.

A day earlier the governor of Rio declared a state of financial emergency as a drop in revenues caused by a crippling recession and a slump in oil prices has left state coffers depleted ahead of the games that start on Aug. 5.

The funds would be used to pay for security personnel and finish a much-delayed metro line to the Olympic venue, said the official who is familiar with the discussions and asked for anonymity because he is not allowed to speak publicly.

Rio's financial crisis threatens to disrupt public services during the Olympics when 500,000 foreign visitors are expected to visit the beach-side city known for its natural beauty.

The Brazil Olympics have already been marred by political turmoil that led to the suspension of President Dilma Rousseff and an outbreak of the mosquito-borne Zika virus that has been linked to brain malformation in babies.

The federal government was already considering an emergency loan to Rio after it missed several debt payments with multilateral banks in May. The missed payments complicated the release of a 1 billion-real loan from the state development bank BNDES to finish the Line 4 of the Rio metro system.

Interim President Michel Temer is expected to announce the emergency funds in a Monday meeting with several governors who are asking him for debt relief for their cash-strapped states.

The finance ministry's press office declined to comment for the story.

(Reporting by Alonso Soto; Editing by Daniel Flynn and Mark Potter)