Brazil putting final touches to new-look infrastructure program

The Brazilian government is working on the final details of the new version of its infrastructure program known as PAC, or growth acceleration program, which is set to be announced in the coming weeks.

The original version of the PAC was implemented during the previous administration of President Luiz Inácio Lula da Silva (2003-11), involving a series of government and private sector infrastructure initiatives aimed at increasing investments.

"The new version of PAC that will be released in the coming weeks will have some differences with respect to the original PAC and I would highlight three main differences," Nelson Barbosa, director of planning and project structuring at BNDES, said during an event organized by the development bank on infrastructure and climate transition.

"In this new version we will see more concessions and PPPs, since we noticed that recent concessions showed positive results. Another topic that we’ll see will be more investments in social infrastructure, with investments in schools, hospitals and solid waste. Finally, the third element is a major emphasis on environmental infrastructure, where we want to invest and encourage more investments in energy efficiency and everything that is related to this, such as clean urban mobility and sanitation," said Barbosa.

However, concessions will not be enough to meet infrastructure needs, according to industry players.

"The Brazilian State still has a large part of the country’s rail network, railroads and ports, and to improve the condition of this entire infrastructure matrix it’s necessary to leverage public investment as well, not just private capital," said Venilton Tadini, the president of infrastructure association Abdib, during the BNDES event. 

ENERGY TRANSITION

Brazil also wants to assume a greater role in the global energy transition but to do that it needs to move quickly.

"Our focus is on energy transition, low carbon mobility. After the approval of the tax reform, we have to be ambitious and focus on regulations for green hydrogen, offshore wind, and to adopt correct incentives and subsidies to develop local low carbon industries. This window of opportunity is open now but will be closed by 2030, because the rest of the world is chasing solutions on these fronts too," BNDES's infrastructure director Luciana Costa said during the event.