LatinFinance - September/October 2013 - 58
BRAZIL
INFRASTRUCTURE
Investors remain skeptical that Brazil’s concession program for financing
much-needed infrastructure projects will succeed where past attempts have
failed. By Thierry Ogier
The way ahead
F
or as many years as poor
infrastructure has been a drag on Brazil’s
growth potential, authorities have sought to
find solutions for it.
the latest such attempt, launched amid
much fanfare over a year ago, set out to
address the main bottlenecks in order to
boost the competitiveness of the region’s
largest economy.
But so far, the Programa de Investimentos
em Logística (Pil), as the concession
scheme is known, has barely got off the
ground. the program has suffered delays
due to regulatory concerns and uncertainty
over the availability of financing.
Brazilian government officials
nevertheless express confidence — perhaps
unsurprisingly — that this time is different.
the 180 billion real concession program
aims to invest in roads and railways, ports
and airports over five years.
a series of auctions are scheduled
through next July. large pension funds and
public-sector banks will be able to support
the winning consortia and will become
minority shareholders in the special
purpose entities (SPes) formed for the
projects. a pool of banks will finance the
operations with the support of the BnDeS,
the state-owned development bank.
While investors have been encouraged
by the government’s moves to boost
local capital markets, the success of the
program remains far from guaranteed.
Previous attempts to address the country’s
bottlenecks failed mainly because the state
wanted to do everything on its own, even
58 l atinfina nce.com - September/October 2013
SLOW PROGRESS: Brazil’s infrastructure
development is still only crawling forward
Andrew JAnszky, MilbAnk
“IF equIty players
can’t get an
adequate return,
how can you
FInance such a
project, the crItIcs
ask?”
though it lacked the financial muscle. also,
investors were unhappy with the terms of
the public-private partnerships and private
concessions and dragged their feet.
But the government of Dilma Rousseff
has since watered down its ideological
tone somewhat, adopting a more investorfriendly approach. “no one is going to
lose money if they invest in Brazil,” Gleisi
Hoffmann, the presidential civil chief of
staff, said earlier this year.
“We started from 5.5% but we improved
the financing conditions a lot — we now
reach return rates of some 15% to 16% per
year in real terms,” finance minister Guido
mantega told LatinFinance regarding the
first series of road auctions.
one of the cornerstones of Brazil’s
approach to concessions in recent years is
that they will not necessarily be awarded
http://www.LATINFINANCE.COM
LatinFinance - September/October 2013
Table of Contents for the Digital Edition of LatinFinance - September/October 2013
Latin Finance - September/October 2013
Contents
Front notes
People news
Debt news
Equity news
M&A news
After the storm
Advantage Mexico
Treading water
New structures
Mexico
Regaining the Initiative
Deficit Ahead
Building up
Switching Course
Brazil
Work in progress
Extreme makeover
Mind the gap
Brazilian life insurance
Andean
Breaking the fall
Reaching out
Market movers
Paraguay
Smoothing the cycles
Thinking big
Parting Shot
LatinFinance - September/October 2013 - Latin Finance - September/October 2013
LatinFinance - September/October 2013 - Cover2
LatinFinance - September/October 2013 - Contents
LatinFinance - September/October 2013 - 2
LatinFinance - September/October 2013 - 3
LatinFinance - September/October 2013 - Front notes
LatinFinance - September/October 2013 - 5
LatinFinance - September/October 2013 - People news
LatinFinance - September/October 2013 - 7
LatinFinance - September/October 2013 - Debt news
LatinFinance - September/October 2013 - 9
LatinFinance - September/October 2013 - Equity news
LatinFinance - September/October 2013 - 11
LatinFinance - September/October 2013 - M&A news
LatinFinance - September/October 2013 - 13
LatinFinance - September/October 2013 - 14
LatinFinance - September/October 2013 - 15
LatinFinance - September/October 2013 - 16
LatinFinance - September/October 2013 - 17
LatinFinance - September/October 2013 - 18
LatinFinance - September/October 2013 - 19
LatinFinance - September/October 2013 - 20
LatinFinance - September/October 2013 - 21
LatinFinance - September/October 2013 - 22
LatinFinance - September/October 2013 - 23
LatinFinance - September/October 2013 - After the storm
LatinFinance - September/October 2013 - 25
LatinFinance - September/October 2013 - Advantage Mexico
LatinFinance - September/October 2013 - 27
LatinFinance - September/October 2013 - Treading water
LatinFinance - September/October 2013 - 29
LatinFinance - September/October 2013 - 30
LatinFinance - September/October 2013 - New structures
LatinFinance - September/October 2013 - 32
LatinFinance - September/October 2013 - 33
LatinFinance - September/October 2013 - 34
LatinFinance - September/October 2013 - 35
LatinFinance - September/October 2013 - 36
LatinFinance - September/October 2013 - 37
LatinFinance - September/October 2013 - 38
LatinFinance - September/October 2013 - 39
LatinFinance - September/October 2013 - 40
LatinFinance - September/October 2013 - Mexico
LatinFinance - September/October 2013 - Regaining the Initiative
LatinFinance - September/October 2013 - 43
LatinFinance - September/October 2013 - Deficit Ahead
LatinFinance - September/October 2013 - 45
LatinFinance - September/October 2013 - Building up
LatinFinance - September/October 2013 - 47
LatinFinance - September/October 2013 - 48
LatinFinance - September/October 2013 - 49
LatinFinance - September/October 2013 - 50
LatinFinance - September/October 2013 - 51
LatinFinance - September/October 2013 - Switching Course
LatinFinance - September/October 2013 - 53
LatinFinance - September/October 2013 - 54
LatinFinance - September/October 2013 - 55
LatinFinance - September/October 2013 - 56
LatinFinance - September/October 2013 - Brazil
LatinFinance - September/October 2013 - Work in progress
LatinFinance - September/October 2013 - 59
LatinFinance - September/October 2013 - 60
LatinFinance - September/October 2013 - 61
LatinFinance - September/October 2013 - Extreme makeover
LatinFinance - September/October 2013 - 63
LatinFinance - September/October 2013 - 64
LatinFinance - September/October 2013 - 65
LatinFinance - September/October 2013 - 66
LatinFinance - September/October 2013 - Mind the gap
LatinFinance - September/October 2013 - 68
LatinFinance - September/October 2013 - 69
LatinFinance - September/October 2013 - Brazilian life insurance
LatinFinance - September/October 2013 - 71
LatinFinance - September/October 2013 - 72
LatinFinance - September/October 2013 - Andean
LatinFinance - September/October 2013 - Breaking the fall
LatinFinance - September/October 2013 - 75
LatinFinance - September/October 2013 - 76
LatinFinance - September/October 2013 - Reaching out
LatinFinance - September/October 2013 - 78
LatinFinance - September/October 2013 - 79
LatinFinance - September/October 2013 - 80
LatinFinance - September/October 2013 - 81
LatinFinance - September/October 2013 - Market movers
LatinFinance - September/October 2013 - Paraguay
LatinFinance - September/October 2013 - Smoothing the cycles
LatinFinance - September/October 2013 - 85
LatinFinance - September/October 2013 - Thinking big
LatinFinance - September/October 2013 - 87
LatinFinance - September/October 2013 - Parting Shot
LatinFinance - September/October 2013 - Cover3
LatinFinance - September/October 2013 - Cover4
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