Apex-Brasil hosts virtual webinar on state of Brazil’s infrastructure industry

Brazil aligns its infrastructure concession strategy, making the country an attractive foreign investment destination even amid COVID-19

BRASÍLIA, Brazil  – Apex-Brasil, the Brazilian Trade and Investment Promotion Agency, today hosted a virtual media salon webinar on the positive outlook for Brazil’s infrastructure industry against the backdrop of COVID-19. This high-level roundtable discussion outlined the steps that the Brazilian government and key industry players have taken to make infrastructure concession projects more attractive to foreign investors, from tax and administrative reforms to eased industry regulations. Moreover, the event showcased infrastructure projects that are opportune for foreign investors interested in operating or allocating assets in this sector.

The webinar convened two major Brazilian government officials in the infrastructure sector, Regional Development Minister Rogério Marinho and Investments Partnerships Program’s Special Secretary of the Secretariat Martha Seillier – along with Apex-Brasil’s Investment Manager Roberto Escoto.

Below are key takeaways:

1. Infrastructure has been, and will continue to be, a significant driver of growth in the Brazilian economy.
   • Infrastructure has been a key priority for the Brazilian government since the 2000s. In 2016, the government launched the Investment Partnership Program (PPI) to coordinate its concession and privatization projects. Brazil also runs the world’s largest concession program, attracting more than US$ 170 billion to its assets.
   • Industry experts predict that foreign investments in Brazil’s infrastructure sector will play a pivotal role in the country’s post-pandemic economic recovery. In fact, a significant portion of the government’s COVID-19 economic growth plan, PRO-BRASIL, is dedicated to bosting infrastructure projects in telecommunications, energy, mining, and transport.
   • Secretary Seillier touched on this path for expansion: “We believe that the path for economic recovery certainly passes through more private investments. The private sector is particularly relevant in the post-pandemic scenario, when Brazil will still hold the largest concessions and privatizations program in the world.”

1. Brazil’s concession projects continue to boom despite the pandemic.

• Despite challenges of the COVID-19 pandemic, Brazil is continuing to move forward with its planned infrastructure projects. Driven largely by strong interest from foreign investors, Brazil has recently made significant progress on major highway and port concessions.
• “Many of Brazil’s economic conditions are favorable at this very moment, despite the COVID-19 crisis. Brazil has an average IRR (Internal Rate of Return) for infrastructure projects of around 10%, which is not seen in any advanced economy – and is even hard to find in emerging markets. Additionally, real interest rates have dropped close to zero, which will reduce borrowing costs and enhance the credit market in general,” says Secretary Seillier.
• Notably, Brazil recently released bidding documents for the privatization of the Port of Santos. The port, which handles 28% of Brazil’s cargo trade, is expected to bring in roughly US$ 71.5 million in investments.

1. The Brazilian government has launched new initiatives to make the country ripe for investment.

• Just this month, the Brazilian National Congress passed a bill that’s expected to greatly enhance the sanitation regulatory framework in Brazil by bringing increased stability and legal security to the sector. Minister Marinho commented on this bill: “Approximately US$ 137 billion in investments are needed over the next ten years to improve Brazil’s sanitation. We bet on our partnership with investors and the private sector to make this come true.”

1. • The Brazilian government recently teamed up with BNDES, Brazil’s state-run development bank, to determine the best format of concession for each project. BNDES also provides financing to foreign investors interested in Brazil’s infrastructure projects.

Today’s webinar also previewed Apex-Brasil’s virtual event, “Invest in Brasil Infrastructure,” which will take place on Tuesday, July 28 from 9:00-11:35 a.m. ET. This discussion will explore how the Brazilian government and private sector are transforming their infrastructure strategies to attract international investment and rebuild the economy in the wake of COVID-19. To join the event, you can register here: https://inevent.com/en/Apex-Brasil/InvestinBrasilInfrastructure/hotsite.php#extra_1594996216771

To read more about investment opportunities in Brazil’s infrastructure industry, please visit: https://investinbrasil.com.br/

To learn more about Apex-Brasil, please visit: http://www.apexbrasil.com.br/en/home.