Brazil plans to attract R$1 trillion in infrastructure investments until 2022

RIO DE JANEIRO, BRAZIL – Brazil expects to attract R$1 trillion (about US$192 billion) in private investments with the infrastructure concessions planned until the end of 2022, Brazilian Infrastructure Minister Tarcisio Gomes de Freitas said Wednesday.

“It is an unprecedented volume of investment contracts. It is the largest infrastructure concession program in the world,” the minister said in an interview with foreign correspondents in Brazil, in which he listed the auctions to offer rights to roads, railroads, airports, ports, power lines, and oil reserves.

The figure includes concessions made since January 2019, with the beginning of the presidency of Jair Bolsonaro, an advocate of a liberal economic policy and incentives to the private sector, and those planned until December 2022, when his term ends.

Freitas explained that most of these concessions will be made in the second half of 2021 and in 2022.

According to his balance sheet, in the last two and a half years, concessions of 70 assets in the transport area alone (roads, ports, railroads, and airports) were granted, the winners of which committed to make investments of 70 billion reais (about US$13.4 billion).

“With the concessions that we will carry out in the second half of 2021, we will contract investments for another 70 billion reais to reach 140 billion reais (US$26.9 billion) this year and end 2022 with investments for 260 billion reais (US$50 billion) in transportation infrastructure alone,” he explained.

These values, he clarified, do not include the concessions made by the Ministry of Mines and Energy for transmission lines, rights to exploit oil and gas, and licenses to build and operate hydroelectric plants and thermal, wind, and solar generators.

“If we add up what has been contracted so far in transportation, energy and mining we are talking about investments for 600 billion reais (about US$115.3 billion) and the forecast to end 2022 with contracted investment for one trillion reais (US$192 billion),” he assured.

Regarding transportation concessions, the figures include the auctions held by the Ministry of Infrastructure in the first week of April, for which it awarded 28 assets (22 airports, 5 port terminals and one railroad).

The winning bidders paid 3.548 billion reais (about US$682.3 million) for the licenses and committed to investments of 10 billion reais (US$1.923 billion) in improvements and expansions.

Freitas assured that the concessions planned for the second half of the year significantly exceed those made in April and are a sign of Brazil’s magnitude.

Among the auctions planned for this year are those of the Via Dutra, the country’s busiest highway connecting São Paulo with Rio de Janeiro; and the Ferrograo railroad, which will enable the shipment to seaports of the grain production of the state of Mato Grosso, the country’s largest granary.

The operator awarded the right to operate the Via Dutra will have to commit to investments in the Rio-Santos highway, which is practically parallel but runs along the coastline of the two richest states in the country.

The port of Espírito Santo (the first large maritime terminal in the country to cease to be public) and the federal highways BR381 and BR262 between Minas Gerais and Espírito Santo, and BR153 (Tocantins) and BR163 (Mato Grosso) will also be privatized this year.

The concession of another 16 airports, including those of Santos Dumont and Congonhas – points of the air bridge between Rio and São Paulo – and the privatization of the port of Santos, the largest in Latin America, which the Government, with the investments it will require, intends to turn into the largest in the entire southern hemisphere, are scheduled for next year.