São Paulo to invest over US$5bn in infrastructure this year

São Paulo state is planning to invest a record 33.5bn reais (US$5.44bn) in infrastructure, including waterworks, in 2025, while simultaneously pushing a concessions and PPP agenda involving 50bn reais.

“2025 will be challenging amid the rise in interest rates and an economic slowdown in Brazil. However, there is room for progress with concessions and PPPs in the infrastructure sector, as these contracts offer strong legal certainty and protect long-term investors from inflationary effects,” Alexandre Pierantoni, head of the corporate finance and M&A area at financial advisory firm Kroll, told BNamericas.

São Paulo state’s budget for the year totals 372bn reais.

"Among the main investment areas are the expansion and modernization of the metropolitan transportation network with more than 12bn reais. Under the 'São Paulo nos Trilhos' program, which includes passenger and cargo transport projects, works are planned for lines Nos. 2-green, 4-yellow, 5-purple, 6-orange, 9-emerald, 15-silver and 17-gold, the São Paulo-Campinas intercity train, PPP lines 11, 12 and 13, as well as the Baixada Santista light rail link," the government said in a statement.

"In the logistics and transportation sector, the budget totals 4.3bn reais for projects to widen and improve São Paulo's roads," it added.

In parallel, the state is planning to offer concessions and PPPs.

"Urban mobility will receive special attention in 2025, with 30bn reais in the auction for the train line lots of Alto Tietê and ABC Guarulhos, covering 194km, along with 14 ferry crossings. In addition, the delivery of the first phase of the north ring road in September and the auction of the Santos-Guarujá tunnel, valued at 6bn reais, are expected to revolutionize transportation in the state," the release said.

São Paulo’s governor Tarcísio de Freitas served as infrastructure minister in the administration of Jair Bolsonaro and favors private participation. 

Although De Freitas is eligible for reelection in October 2026, analysts expect him to eye a presidential run, with a successful concessions and PPP agenda potentially improving his chances.