Following a meeting between Banco Santander (Santander) chairman, Emilio Botin, and Brazil’s President, Dilma Rouseff, the Spanish bank has pledged to commit $10 billion of infrastructure financing to Brazil over the next three years.
Santander has identified a number of ways in which it may be involved in infrastructure projects:
*As a financial advisor to potential investors wanting to bid for contracts;
*As a provider of bank guarantees for projects during their construction phase;
*As intermediary to help obtain third-party credits from development banks, multilateral agencies, export credit organisations, or to structure debt issues in the local or international capital markets;
*As an asset manager, for example raising money through infrastructure funds;
*In a corporate finance context, identifying financial investors to form consortia;
*In a private banking context by structuring investment products based on infrastructure projects.
Santander has a historic involvement in project finance in Brazil, having structured port projects for the likes of BTP, Embraport and Portonave and done the first project bond in the country.
It is also the leading adviser on renewable energy tenders, with a 38 percent market share, and was sole financial advisor on all of Sao Paolo state’s rail public-private partnership (PPP) deals.
Furthermore, Brazil accounted for 25 percent of Santander’s ordinary attributable profit in the first half of last year.
The bank said it was also hoping to arrange an infrastructure seminar jointly with the Brazilian government with the aim of drawing more Spanish and European companies to Brazil’s infrastructure effort – though a date for this has not yet been set.
Late last year, Brazil outlined a $121 billion infrastructure programme with the aim of overcoming a 30-year logistics deficit. The government is currently in the midst of putting out to tender a number of major infrastructure projects in the road, rail, ports, airports and energy sectors.