Rio de Janeiro  - Brazil's national development bank mulls a 700-million-dollar loan to Argentina's national carrier Aerolineas Argentinas to finance the acquisition of Brazilian-made planes.

Luciano Coutinho, the president of Brazil's national development bank BNDES said Friday that the country would provide a loan to the Argentinian government.

Aerolineas Argentinas is said to plan buying 26 of Brazil's Embraer 190 passenger planes to replace older Boeing and McDonnell Douglas jets.

The Embraer jets, designed for regional service, have a capacity for carrying 98 to 106 passengers.

The Argentinian airline's planes have an average age of 22 years, more than double the average age of large European airlines' jets.

Brazil's decision would be a major boost for the ailing national planemaker, who is reeling under the effects of the global downturn, as orders dropped sharply. Embraer recently laid off 4,300 employes, that is about 20 per cent of its workforce.

Coutinho, however, stressed that the loan to Argentina did not constitute a subsidy to Embraer. "If we finance the buyers of the planes, that does not mean we subsidize the company [Embraer]," he said. (dpa)