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Public-private partnerships market in Brazil

Brazil is a developed market for public–private partnerships (P3s). The country performs best in the institutional framework, operational maturity and investment climate areas of P3 projects. Brazil also has solid scores in P3 procurement and contract management (higher than Latin America and the Caribbean, OECD and high-income country scores).

About 400 projects of concessions or P3s in infrastructure, developed by Brazil’s federal (100 projects in railways, airports, port terminals, highways and power transmission lines) and state governments (300 projects), total approximately Can$79 billion in investments over decades, according to the Brazilian Association of Infrastructure and Basic Industries. The transport and sanitation sectors, the most deficient in infrastructure, are to receive R$113.9 billion in funding between 2021 and 2025, but that amount will be insufficient to raise the level of infrastructure investments in Brazil. In 2019, the total investment (public and private) in transport and logistics was R$25 billion, equivalent to 0.34% of Brazil’s gross domestic product (GDP). To improve the quality of the country’s highways, railways, ports and airports, it would be necessary to contribute R$149 billion or 2.26% of GDP annually.

The quality of projects offered to the private sector has improved in recent years and the pace of bidding auctions have increased. These ensure an increase of private investments, but Brazil still needs public contributions, which are at historic lows. In 2019, they totaled only one third of private investments.

Advances in regulation, such as the new regulatory framework for sanitation, the “maturity” of control bodies, such as the Federal Court of Accounts, as well as modernization of the regulatory frameworks are some factors encouraging private investments.

The value of concession and P3 projects combined in the transport sector should surpass Can$1.5 billion in 2021, with a potential to reach nearly Can$5 billion in 2024.

Brazil is committed to improving its infrastructure in various areas and is open to seeing more Canadian companies developing these projects. The decision is yours! For additional information, please contact Marcio Francesquine, marcio.francesquine@international.gc.ca.

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