Brazil set to add projects to privatization and concessions agenda

Brazil's investment partnerships council (CPPI) has recommended adding 13 projects and assets to the federal privatization and concessions agenda.

If the recommendation is accepted, the portfolio of the federal investment partnerships program (PPI) will contain 189 projects, according to a PPI press release.

The recommendation is part of a formal procedure the government must follow. The PPI was created in 2016 to help coordinate PPPs, privatizations and concessions, providing technical support and supervision.

Among the assets and projects recommended for inclusion are the planned privatization of federal oil firm Petrobras, the offer of four port terminals, and airports and rail assets, plus auctions in the energy segment and a gold project.

This growing list is forcing banks to diversify their project finance operations.

“Looking at the largest banks operating in the project finance area two years ago, we saw that all banks prioritized energy projects, with a smaller proportion [focused on] logistics and other segments,” Fernando Guimarães, Bradesco BBI’s head of project finance, told BNamericas.

"Now this has changed, energy is still important, but today I would say that this is part of 30% of bank operations in general, while another 30% is logistics, 30% sanitation and the rest relates to other areas," he added. 

The four port terminals planned to be auctioned are the SFS201 in São Francisco do Sul port, Santa Catarina state; POA11 in Porto Alegre port, Rio Grande do Sul; VDC04 in Vila do Conde, Para state; and TGS02 in Itaguaí port, Rio de Janeiro state.

The auctions are expected to generate combined investments of 33bn reais (US$6.87bn).

CPPI also recommended including the privatization of the Santos port authority, which administers the country's busiest port.

A crucial highway concession relates to Paraná state’s integration beltway, with more than 44bn reais in expected investments.

In the airport sector, 15 facilities are planned to be auctioned, expected to generate 7.3bn reais in investments.

CPPI RECOMMENDATIONS

– reoffering Rio de Janeiro's Galeão airport concession;

– reoffering the concession of highway BR-163/MT, Mato Grosso state;

– lease of four port terminals;

– Santos port authority privatization;

– Ouro Natividade gold project, owned by CPRM, in Tocantins state; latest data suggest resources of 725,000t averaging 1.02g/t gold;

– A-5 and A-6 energy and capacity reserve auctions;

– studies and processes directed toward the privatization of Petrobras;

– 7th round of the airport concession program, comprising 15 facilities;

– reoffering concessions for São Gonçalo do Amarante and Viracopos airports;

– Paraná state integration beltway.