Brazil seeks restart of infra privatisation programme

As the South American country battles covid-19, investment officials make the case that long-term infrastructure investments will outlast the short-term impact of the pandemic.

Brazil is looking to restart its foreign investment partnership programme after the pandemic halted most of its activities by organising upcoming auctions for airports and water treatment projects.

Officials from Brazil touted the sustainable and long-term investment opportunities the country is offering to outside investors in a webinar organised by Apex-Brasil, a government-affiliated trade group. While covid-19 has made Brazil one of the worst-hit countries, officials responsible for investment partnerships and regional development made the case that the long-term contracts securing infrastructure investments will outlast the pandemic.

“We are moving forward with the opportunity for private investments,” Martha Seillier, special secretary of the secretariat who leads the government’s Investment Partnerships Program (PPI), said in the webinar. She said Brazil is aiming to hold its next airport auction in early 2021, after the pandemic forced the cancellation of an auction that was supposed to be held later this year.

“Because we’re offering 30-year contracts and dealing with a short-term health crisis, we don’t intend to stop with our offers and opportunities,” Seillier said, adding that 22 airports around the country, including international hubs in Curitiba and Foz do Iguaçu, will be up for auction.

Brazil’s PPI launched in 2016 and has facilitated 178 public-private partnership or privatisation opportunities. Seillier said the 36 auctions held in 2019 generated more than $100 billion of investments. Another auction that Brazil expects to attract interest from investors is its Ferrogrão railway, a 1,000-kilometre project that will help bring the country’s agricultural production to the Port of Miritituba.

“The agenda of PPI was going very well until the coronavirus,” Seillier explained. “We had to reinvent our business.”

Rogerio Marinho, Brazil’s regional development minister, added that the country is seeking to attract foreign investment to its water sector as well. Recently-approved legislation for water sanitation will allow for overseas capital to help revitalise Brazil’s hydro basins and invest in wastewater treatment facilities.

He added that the investment opportunity represents around $100 billion and said part of the new legislation will allow for foreign investors to raise capital for projects through green bond issuances.

“There is no doubt that water security is very important to Brazil,” Marinho said. “This is an opportunity to work with the revitalisation of the most important basins in this region.”