Infrastructure projects in Brazil are looking for Arab investors willing to provide funding.
Brazil is seeking investors from Arab countries who are interested in funding infrastructure projects. As the country now has new state governors and a new president, Brazil is expected to become an attractive location for international investors who want to fund infrastructure projects. Due to the urgent need to develop its logistical systems and energy production infrastructures, Brazil is a good destination for investments at this time.
Guilherme Schmidt, a partner in law firm Schmidt Valois Advogados and an expert in infrastructure projects, told: “This is an interesting moment for potential investments given that the first years of government usually bring new possibilities. “And fortunately, Brazil learned from its past errors and will avoid repeating them and driving away investors.”
During the World Economic Forum in January in Davos, Brazil’s Finance Minister Fernando Haddad met with Saudi Investment Minister Khalid Al-Falih and discussed potential partnerships.
“They have investment funds and are paying attention to the calls for partnerships that the Brazilian government, the states and the municipalities will open from now on. That is good because it will make available a significant volume of funds,” Haddad said after the meeting.
The authorities have learned that they need to work with public-private partnerships if they want to access the necessary funds and stimulate change. Brazil’s Finance Minister met with the Saudi Investment Minister during the World Economic Forum in January in Davos to discuss potential partnerships. There are several partnership opportunities that will emerge in renewable energy, and Brazil already has a solid concession model.
However, expectations are higher when it comes to logistical infrastructure. Ports are another promising field, and the country’s largest exporter of halal protein in the world is partnering with Gulf nations to improve Brazil’s logistical systems. During President Jair Bolsonaro’s administration, Brazil strengthened its ties with the Gulf. Saudi Arabia’s Public Investment Fund announced $10 billion in investments in different areas in Brazil after Bolsonaro visited the Kingdom in 2019.
Earlier the plans for the project were suspended due to environmental concerns, but Filho hopes that such obstacles can be solved now, and will discuss the issue with Environment Minister Marina Silva. “The area of transport brings additional challenges given that conceding projects to the private sector is something rather new and, at times, there are no established models to do it in Brazil,” Castelar said.
Among the Brazilian states, not only Sao Paulo but also Parana, Rio Grande do Sul and Goias will probably take the lead and launch infrastructure projects to be funded by the private sector, Castelar said. “Those are states that had more progress in structuring public-private partnership models,” he added.
Mansour said some state governors attended Expo 2020 in Dubai and opened conversations with Arab authorities.
“When we talk about megaprojects, local partners are always needed to take part in the investment, directly or indirectly. Brazil has strong financial institutions that have been playing that role,” he concluded.
