SAO PAULO - Brazil's state development bank approved on Wednesday 4.4 billion reais ($2.6 billion) in loans to local telecom group Oi for expansion plans through 2011.

Oi will use the funds to implement broadband Internet services in more than 3,000 Brazilian municipalities and 28,000 schools by the end of next year, BNDES, as the lender is known, said in a press release. ($1=1.708 reais) (Reporting by Guillermo Parra-Bernal, editing by Gerald E. McCormick)