BNDES signs Brazilian roads concession

A consortium that includes Spanish engineering and construction company Isolux Corsan will invest up to $615m in the project, which involves upgrading and operating two federal roads in the Brazilian state of Bahia for 25 years.

The Brazilian Development Bank (BNDES) and several other multilateral lenders have entered into a 25-year concession with a private consortium to improve and expand almost 700 kilometers of federal roads in the eastern state of Bahia, according to a news release from the bank.

The Rodobahia consortium, composed of Spanish engineering and construction company Isolux Corsan and Brazilian companies Engevix and Encalso, was awarded the contract back in January. Brazil’s National Agency for Land Transport awarded the contract.

The contract calls for them to improve and operate two major federal roads. The first is a 567-kilometre section of the BR-116 federal highway between the city of Feira de Santana in Bahia and the border of the neighboring state of Minas Gerais in the south. The second is a 113 kilometre section of the BR-324 federal highway connecting Feira de Santana with the Port of Salvador on the Atlantic coast.

Up to $615 million will be invested by Rodobahia to improve the two roads, BNDES said in a statement. In January, Isolux estimated the expected investment for the two projects at €720 million.

BNDES, together with the International Finance Corporation, the private investment arm of the World Bank Group, and the Inter-American Development Bank have a $4 billion multilateral fund for investing in projects such as this.

Besides BNDES, the IFC, the World Bank Group also sponsored the project on behalf of the Brazilian government, according to the statement.