In an interview with CNN on Thursday, July 28, the executive director of Brazil and Suriname at the Inter-American Development Bank (IDB), Martha Seillier, said that despite the geopolitical challenges and the Covid-19 pandemic, infrastructure auctions in Brazil have attracted large investors.
“Despite Covid-19, the complex geopolitical context with the war in Europe and all that, all the auctions that have been taking place in Brazil have been attracting large global investors for long-term contracts,” she said.
According to Seillier, concession projects, for example, demand contracts of up to 30 years. Therefore, the investor is already aware that, during this period, macroeconomic variables can arise.
“Eventually, you may have a shock or a short-term crisis. All this is priced and mitigated if the contract is good. So, it is necessary to have a good risk matrix to say what is the responsibility of the private investor and what is the responsibility of the government – which is a partner over a 30-year contract; all this balances out,” she explains.
The specialist also evaluated that Brazil had already been following a path of reducing the strategy of developing infrastructure only with public investment.
“We had been increasingly believing that the way to overcome the lack of infrastructure in Brazil was to open more and more doors to private investment, and this is the successful way because of our size and the amount of investment that we need, given our fiscal reality.
With information from CNN