Brazil looks to attract US$56bn in infrastructure investments

The Brazilian government is looking to attract around 300bn reais (US$56bn) in infrastructure investments in the coming years, with a large participation of the private sector. 

"By 2022 we will offer more than 100 concessions for the private sector. In 2021 alone, we will offer 52 assets from various segments and of various sizes," said infrastructure minister Tarcísio Gomes de Freitas during a webcast.

"With those assets offered we will attract a total of 300bn reais in investments for infrastructure, with a total of 260bn reais coming from the private sector, which will be key for our economic recovery," he said. 

The Brazilian economy is expected to contract 4.5% this year and expand 3.45% in 2021, according to a weekly central bank survey with economists.

Due to the severe fiscal impact generated by the COVID-19 pandemic with a massive increase in spending on social programs, the possibility of the federal government to invest in infrastructure is now limited. 

Brazil’s private sector has been responsible for more than 60% of infrastructure investments in this decade, reaching 72% last year, which represents 89bn reais, according to a research report from local infrastructure association ABDIB.

Despite the government’s efforts to attract more investments from the private sector, mainly under its privatization and concessions program (PPI), ABDIB still sees the government’s role in infrastructure projects as crucial. 

Even if the private sector manages to quickly double its annual infrastructure investments, there will still be a large gap to meet Brazil’s immediate infrastructure needs, said the trade group in the report. “The public sector continues to play a leading role in transportation, urban mobility and basic sanitation." 

Investments in infrastructure by the government can also fuel economic growth and help improve the fiscal situation as stronger growth leads to higher tax revenue, ABDIB added.