During the first meeting of the Investment Partnership Program (PPI), on September 13, the Brazilian Federal Government officially announced a concessions and privatizations’ package consisting of 25 projects for the years of 2017 and 2018. The majority of such projects were already listed in previous programs launched by former president Dilma Rousseff, but never made them to the bidding phase.
The chairman of the Caixa Econômica Federal Bank (CEF), Gilberto Occhi, stated that CEF and the National Bank for Economic and Social Development (BNDES) have around R$ 30 billion (about US$10 bi today) to finance the infrastructure projects.
According to Mr. Occhi, the Brazilian Government has taken some actions to simplify the issuance of Infrastructure Debentures – “any project listed in the program may be automatically authorized to issue Infrastructure Debentures”.
The Brazilian Government also announced that the incoming infrastructure projects will not be granted without the prior issuance of the environmental license by the competent authority – hence, stamping the project as environmentally viable from day one (nowadays, apart from hydroelectric power plants, all infrastructure projects allocate the environmental licenses as a sponsor’s responsibility, to be obtained after the adjudication phase) and the technical approval of Brazil’s Tribunal de Contas da União (TCU), equivalent to the General Accounting Office of the United States. Both measures aim to grant to investors safety and clarity in the bidding processes.
Opportunities in Brazil – recent updates
Pre-Salt areas, highways, railways, port terminals, mining related businesses and generation and distribution of energy businesses are part of the package:
- AIRPORTS | Concession of airports in Porto Alegre (RS), Salvador (BA), Florianópolis (SC) and Fortaleza (CE). The bidding notices shall be published in the last quarter of 2016 and the auction should happen in the first quarter of 2017;
- ENERGY | Auction of hydroelectric power plants in São Simão, Miranda and Volta Grande, presently granted to Cemig in the second half of 2017. The bidding notice shall be issued later in 2016;
- ENERGY | Privatization of Amazonas Distribuidora de Energia, from Boa Vista Energia, the Acre Electricity Company, Energy Company of Alagoas, Energy Company of Piauí and Rondônia Power Plants;
- MINING | Auction of four areas of the Research and Mineral Resources Company under the Ministry of Mines and Energy: phosphate areas on the border between Pernambuco and Paraiba, copper, lead and zinc in Tocantins, coal in Rio Grande do Sul and copper in Goiás;
- OIL & GAS | Concessions of areas in the pre-salt blocks, in the 14th Bidding Round of Oil and Gas Exploration in areas not yet disclosed, and in the 2nd Round of Bidding areas of Sapinhoá, Caracará, Gato do Mato and Tartaruga Mestiça. The auction is scheduled for the second half of 2017;
- RAILWAYS | Concession of the North-South railway between Porto Nacional (TO) and Estrela d’Oeste (SP), which will include Sao Paulo, Minas Gerais, Goiás and Tocantins. It should be auctioned in the second half of 2017;
- RAILWAYS | Auction of the Ferrogrão railway from Sinop (MT) and Miritituba (PA) and Railroad East-West Integration (Fiol) between Ilheus and Caetité (BA);
- ROADS | In the second half of 2017, further bidding notices should be posted for five road sections, including the BRs 364 and 365, between Goiás and Minas Gerais; and BRs-101, 116, 290 and 386, in Rio Grande do Sul;
- TERMINALS | Concession of S