Latin Finance - March 2008 - 32

Brazil infrastructure finance first lot, the required investment is estimated at just over $1 billion. For the later lots, no figures are yet available. São Paulo and Rio de Janeiro. (See Box on page 30.) The question is, how fast can the government get the legal framework ready, especially for federal public private partnerships (PPPs) to make these projects viable. So far, despite promises, not a single federal PPP has been enacted. “I am not optimistic about the federal government getting its act together on PPPs,” says Franco. “These projects require an absurdly complex legal and financial structure.” The states are another story, she says, predicting more offers soon not only from São Paulo, but from the neighboring state of Minas Gerais, whose infrastructure department she calls “disciplined, efficient, and well-run.” Dupui is more optimistic, not only about the states, but also on the federal government. “We are expecting a huge amount of opportunity, in project and in structured finance, and we’re hungry to get a piece of all of it,” he says. He believes the demand will be so great that it will exceed the capacity of the BNDES and multilateral organizations, creating even more opportunity for private investors. “We’re looking at other forms of financing for these projects,” says Dupui. “Debentures and bonds, national and international capital markets. Once Brazil achieves investment grade, which we expect this year, all this should become possible.” He is not even worried about the turbulence ripping through international financial markets. “The difficulties in the world financial market should lead to a flight to quality,” says Dupui. “Infrastructure in Brazil is quality. We only stand to gain.” LF Ports Potential For Schahin, auctions of highway concessions should be successful, but they present the same problem as jumbo energy projects: “When the investment opportunity is so obvious, the perspective for returns is usually not spectacular.” He thinks that the less well-known and perhaps more risky areas offer the best opportunities. “Ports, airports, and railroads need huge investments, and they’re fundamental for Brazil’s continued growth,” says Schahin. “The government has no generalized plan for these sectors, but discreet negotiations and various deals are occurring.” Schahin also expects opportunities to open up in basic sanitation. “We still don’t know what the model will be, but there’s huge demand.” Wiegand offers a note of caution. “We’ve been following the area of basic sanitation for years,” she says, “hoping that the government will issue new regulations to allow private investment, but it hasn’t happened yet. Right now I think the sector is still too risky.” However, she does see opportunities in ports. “The difficulties here are with environmental regulations,” she says. Brazil’s port network is very decentralized, with a mix of public and private ownerships, often within a single port facility. WestLB is structuring the financing of a greenfield container terminal in the southern state of Santa Catarina to the tune of $200 million. Portugal’s Banco Banif, which has recently formed several private equity funds to invest in infrastructure in Brazil, also sees opportunities in both ports and the rail and road links feeding them. “Progress is irregular but the medium-term tendency is for the port system to be privatized and rationalized,” says fund manager Bruno Brito. “Bureaucracy and environmental injunctions are a problem, but they can only slow, not stop, progress. Brazil’s needs are just too great,” he adds. Proving the axiom that one man’s problem is another’s opportunity, one of Banif’s recently opened funds targets special situations. “A port where work has been paralyzed due to an environmental injunction might need a capital infusion to keep going. That could be an opportunity for us,” says Brito. Dupui sees enormous potential in ports, especially if the big publicly operated ones are some day offered as concessions, but he is even more excited about urban railways. “São Paulo was very successful in financing a new metro line,” he says. “We’re hoping to see more projects here in the near future, maybe another metro line, maybe an express train from the city centre to the international airport.” He reports that even though the government has not issued any details about this proposed express train, Santander has heard from “at least 15 major investors” interested in the project. Especialista Senior de Energía Washington, DC La Unidad de Energía de la Región de América Latina y el Caribe tiene a su cargo la implementación de la estrategia de desarrollo del sector de energía, la cual constituye un elemento esencial para la reducción de la pobreza y la promoción de la equidad y el desarrollo sostenible. Los asuntos clave de la Unidad incluyen la seguridad energética, el financiamiento de inversiones en el subsector eléctrico, mejoras en la eficiencia de las empresas del sector, y los retos asociados con la cobertura universal y el cambio climático. La Unidad busca candidatos para una posición de Especialista Senior de Energía. El candidato elegido desempeñará un papel importante en apoyo del portafolio de proyectos y de trabajo analítico en la Región. Las principales responsabilidades del candidato serán: (i) preparar e implementar proyectos sectoriales de energía; (ii) identificar y desarrollar nuevas oportunidades de negocio; (iii) orientar el diálogo con el sector energético para algunos países; (iv) ofrecer servicios de consultoría a clientes y equipos del Banco; (v) liderar la implementación de proyectos de inversión; y (vi) desarrollar y llevar a cabo trabajo analítico. La posición requiere viajes internacionales. El criterio de selección incluye: (1) un postgrado en ingeniería, economía, administración de negocios o áreas afines, con por lo menos 8 años de experiencia práctica relevante, (2) habilidad en la administración y supervisión de proyectos, (3) habilidad analítica, (4) habilidad para trabajar en equipo, (5) habilidades en comunicación oral y escrita, y (6) dos condiciones esenciales de idiomas: (i) conocimiento del español o del portugués, y (ii) facilidad de comunicación verbal y escrita en inglés. Los candidatos calificados e interesados pueden inscribirse electrónicamente en http://www.worldbank.org/jobs y escoger la posición vacante número 080301. La fecha de cierre es el 17 de marzo de 2008. Tip of the Iceberg This year may be busy, but it will only scratch the surface of Brazil’s needs. The highways scheduled for auction are just a fraction of the country’s roads network. Not just ports, but airports need to be renovated and expanded; and presidential chief of staff Dilma Rousseff has promised a bullet train between 32 LATINFINANCE March 2008
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Latin Finance - March 2008

Table of Contents for the Digital Edition of Latin Finance - March 2008
