Public infrastructure investment on the rise in Brazil

Public investment in Brazil’s infrastructure sector continued its upward trajectory in the first quarter of the year.

Investments totaled 2.41bn reais (US$468mn) in January-March, up 27.8% year-on-year, according to figures from state-run logistics firm Infra.

"The infrastructure investment increase was very significant, almost 30%, a percentage that I believe will not be maintained,” Alberto Sogayar, an infrastructure lawyer at law firm Sogayar e Alcântara Advogados, told BNamericas. 

“I understand investments in infrastructure will be maintained, very much in line with the current government's plan but at a lower level, either due to budget limitations or because it's a [municipal] election year and the focus will be on the elections," Sogayar added.

Brazilians will go to the polls in October to vote for mayors and city council members. These are elections with strong participation of national political leaders looking to bolster their local voter bases.

Since he took office in January 2023, President Luiz Inácio Lula da Silva has made the expansion of public infrastructure investment a key part of efforts to boost the economy.

However, budget limitations could become an obstacle to this strategy. After months of increasing tax revenues, public income is expected to decline in the coming months as the economy has lost steam.

Local experts and the government both see the private sector playing a key role in infrastructure investments.

"There is a great need for increased investment in various areas, but mainly in what used to be called social infrastructure. Education, health and sanitation are the most sectors that need it most,” Paulo Dantas, an infrastructure and project financing specialist at law firm Castro Barros Advogados, told BNamericas. 

“There are already good projects in this respect and ideally, they will multiply. Public-private partnerships should be the key to putting Brazil at an acceptable level in the development of its infrastructure.”

“We have a robust plan with tenders in place and the greatest ever potential for these concession contracts. For me, this will make 2024 a watershed year for private sector investments in Brazil," transport minister Renan Filho said on Thursday at a seminar hosted by Brazilian infrastructure association ABDIB.

During the remainder of this year, the government plans to offer concession contracts for 13 federal highways.

In the first quarter, the road segment received 2.19bn reais in public investments, up 24% year-on-year.

Ports and waterways saw investments of 70mn reais, up from 10mn reais in the same period of last year, while airport investments increased 54.9% to 120mn reais. However, public investments in the rail segment dipped 14.2% to 30mn reais.