Great interest of investors in Brazilian infrastructure projects

Major auctions of infrastructure projects will take place in Brazil until the end of the year. Investor interest is high.

by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung

 

From today until the end of the year, auctions of licenses in infrastructure, which have been prepared for some time, will take place in Brazil and will be among the most extensive in recent years. Surprisingly, interest seems to be high – from both domestic and foreign investors.

For example, the trunk roads between Rio and São Paulo, between Minas Gerais and Espírito Santos, and in Paraná are being offered. In these concessions, the companies are committing to investments of around €10 billion. In addition to the leading local concessionaires Ecorodovias and CCR, foreign groups and investors from Spain and Australia are also planning to participate in the auction for the first time.

A total of nine port terminals will also go under the hammer by the end of the year. In the port of Santos, three terminals will be put out to tender: Two for fuel, one for containers. Here, too, competition between Asian and European port operators is likely to be fierce. The remaining licenses are distributed among ports throughout Brazil.

For the auction of 5G mobile licenses, a surprising 15 companies have submitted their bids, some alone, some united in consortia. Telecom regulator Anatel had expected far less interest. In the auction, which will start on November 4, the companies commit to a total investment of around €8 billion.

It is unclear whether the licenses of the inland airports of São Paulo (Congonhas) and Rio de Janeiro (Santos Dumont) will still be put out to tender under the current government. In the case of train routes, it is also not yet clear whether the new licensing procedure for operators can still be implemented. According to this procedure, private operators can submit applications for railway lines which they will then be able to operate without restriction. There are applications from companies under the new railway concept (“Pró-Trilhas”) worth €13 billion.

Since 2019, a total of 74 licenses have been given to private parties, who will invest €11 billion in projects over the next few years. A total of 34 airports, 29 port leases and 99 other permits for terminals for private use, six railways (concessions, renewals and cross-investments) and five motorways have been handed over to private investors.

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