Brazil Infrastructure: Up Close and Regional

By Biliana Hristova, EMIS Insights Chief Editor

In line with the efforts of the national administrations of the 2016-2022 period, several states in Brazil created their own schemes for the privatisation or concession of infrastructure assets. Now that Lula da Silva’s administration (inaugurated in January 2023) seems to have embarked on a different strategy, these programmes could become key for private investors looking to enter the Brazilian infrastructure sector. While da Silva withdrew seven state-owned companies from the National Privatisation Programme (PND) and three from the PPI programme in 2023, states like Sao Paulo, Minas Gerais, Rio Grande do Sul, and Parana announced or already completed privatisations during the year. Moreover, other states like Goias, Santa Catarina, Rio de Janeiro, Ceara, and Mato Grosso do Sul, are expected to expand on their public-private partnerships (PPP) and concessions programmes. 

For state governments, the main rationale behind privatisations and public-private partnerships is their high level of debt, which prevents them from making vital infrastructure investments, as well as the higher efficiency of private operators. However, further privatisations, especially of meaningful assets and companies, are expected to demand hefty negotiations between the state, municipal, and federal governments, which could delay or prevent their realisation, according to undisclosed analysts cited by Bloomberg Linea in March 2023. 

As shown by the plurality of state government programmes, opportunities for investors looking to tap into Brazil infrastructure sector are abundant and diverse, both in terms of geography and economic sectors. Although states like Sao Paulo and Minas Gerais might take the highlights, others are eagerly trying to catch up and become more attractive for investors. And while the water and sanitation sector is poised to be the star in terms of tenders during 2024, others like transport, energy, and health, are providing market participants with meaningful alternatives of investment. Overall, these programmes will provide investors with opportunities even in the face of a national administration that seems reluctant to conduct further privatisations in the infrastructure sector. 

For more in-depth information and insights on Brazil’s state privatization programmes, check out EMIS Insights’ thematic report Brazil Infrastructure: Up Close and Regional.