4.3.9Net Financing Costs
2022 | 2021 | ||
|---|---|---|---|
Interest income on loans & receivables | 0 | 1 | |
Interest income on investments | 10 | 1 | |
Net foreign exchange gain | - | - | |
Other financial income | 2 | 1 | |
Financial income | 12 | 3 | |
Interest expenses on financial liabilities at amortized cost | (352) | (202) | |
Interest expenses on hedging derivatives | (28) | (99) | |
Interest expenses on lease liabilities | (2) | (2) | |
Interest addition to provisions | (1) | (1) | |
Net cash flow hedges ineffectiveness | (1) | - | |
Other financial expenses | (0) | 0 | |
Financial expenses | (385) | (304) | |
Net financing costs | (373) | (301) |
The company has increased its debt (see note 4.3.23 Borrowings and Lease Liabilities) in order to finance its ongoing construction program of five FPSOs.
Therefore, the increase in net financing costs is mainly due to: (i) higher interest expenses as a result of the Company's project financing obtained for projects under construction, mostly the project financing of FPSO ONE GUYANA, FPSO Sepetiba, FPSO Prosperity and bridge loans for FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão.