Spotlight: The remainder of Brazil’s 2024 tender pipeline

Brazil plans to hold a series of auctions by the end of the year for concessions and PPP contracts in the infrastructure, water, electric power, and mining sectors.

Of the 12 contracts to go under the hammer, 10 will be offered in December. The fierce competition seen in recent auctions suggests a strong finish to the year.

"What explains the strong interest in recent auctions is the improvement in project structuring, with a better balance of risk," says Roberto Guimarães, former treasury secretary and current planning and economics director at Brazilian industry and infrastructure association ABDIB.

"There is also the growing demand for the use of infrastructure and, no less important, the expectation of locking in returns in a scenario where interest rates will fall over time."

Several financing mechanisms also support the appetite for new contracts despite the country's benchmark interest rate being 10.75%.

"We have a new and unprecedented financing model with three pillars, which will get the job done: Support from BNDES, BNB, BASA, and Caixa. The capital market with incentivized and infrastructure debentures, IPOs, funds and banks, and external resources from the Brasil Eco Invest program, Fundo Clima, multilateral organizations, including exchange rate protection mechanisms," Guimarães tells BNamericas.

BNamericas looks at the auctions that will be held on São Paulo stock exchange B3.

November

Santa Catarina state will offer a PPP contract for the Jaguaruna airport on November 28. The company that wins will be responsible for the airport’s operation, maintenance and expansion during 30 years.

Also on November 28, São Paulo state will hold the auction for the 30-year Nova Raposo highway concession, which will demand investments of 7.3bn reais (US$1.25bn).

December 

Of the 10 auctions planned for the last month of the year, four are for highway concessions.

On December 6, Mato Grosso do Sul state will put under the hammer the 30-year concession for the BR-262, BR-267, MS-040, MS-338 and MS-395 highways – making up the “pulp route” – in a single package. Expected investments amount to 9bn reais.

On December 12, the federal government will offer the contract for the Rota Verde (green route), which includes stretches of BR-060 and BR-452 with a total extension of 426km. The estimated investments during the 30-year concession are 6.86bn reais.

The federal authorities will also offer concessions for lots 3 and 6 of Paraná state highways, which are expected to generate 35.1bn reais in investments. On December 12, lot 3 will be offered and lot 6 is scheduled for December 19.

Meanwhile, the government will launch tenders on December 18 for leasing contracts involving three port terminals, which are expected to generate investments of 3.62bn reais.

The contracts will be offered separately for the ITG02 in the port of Itagüí, in Rio de Janeiro state; the MCP03 in Santana port, Amapá state; and MAC16 in Alagoas state’s port of Maceió. 

The other contracts to be offered next month include the concession of the Serra Dourada sports stadium, in Goiás state, with the auction set for December 4. 

Minas Gerais state power firm Cemig will sell three hydroelectric plants as well as a smaller plant, through a single lot, in an auction on December 5.

On the same day, the city of Angra do Reis will offer a concession contract for its natural park.

On December 6, a consortium formed by 10 cities in São Paulo state will offer an urban waste management concession. And on December 20, Maranguape municipality in Ceará state will offer a streetlighting PPP contract. 

Mining sector 

Brazil’s geological service (SGB) will hold an auction for three mineral exploration areas on November 27.

The areas to be offered are the Natividade gold project in Tocantins state, the Santo Inácio diamond project in Bahia state and Capim river kaolin project in Pará state.

They were part of an auction in June when SGB offered five areas, but did not attract bidders.