RIO DE JANEIRO, BRAZIL – The Rio de Janeiro Subway Concession was authorized by the Ministry of Regional Development (MDR) to raise funds in the financial market through debentures.
The ordinance approving the project guidelines proposed by the company as a priority was published on Wednesday, October 28th, in the Federal Gazette. Up to R$1.2 billion (US$210 million) may be invested by the private sector, which will benefit at least 900,000 passengers carried daily.
The initiatives include works to adjust circulation spaces, as well as special works (such as overpasses, elevated highways, etc.), permanent roads, including rails and train security equipment, rolling stock, operating systems, information technology and electronic ticketing, among others.
The Rio de Janeiro subway, operated by the concessionaire MetrôRio, counts 41 stations spread over its 54 kilometers of track, serving – directly and indirectly through its integration with other modes of transport – several districts in the city, including downtown, with the highest concentration of jobs, in addition to major cities in the Metropolitan Region.
The measure is the result of Ordinance n. 532/2017, which updated the requirements and procedures for approval and monitoring of urban mobility priority projects. The regulation concerns the issuance of financial market instruments – such as debentures, real estate receivables certificates and credit rights investment funds – to finance initiatives considered a priority by the Federal Government.
In the market, this is known as infrastructure debentures (or incentives) and are exempt from some taxes. This is due to the predominance of debentures in this type of activity, compared to other fundraising instruments. Currently, the Ministry of Regional Development has three urban mobility projects in progress, which have already raised R$611.5 million in the market through debentures.
MetrôRio has been experiencing financial hardship. An example of this struggle in meeting its commitments is the ‘Linha Amarela’ (Yellow Line), one of the city’s main expressways, which belonged to the same group and was used as collateral for debt payment.