Brazil has become the largest market for public-private partnerships (PPPs) in Latin America, having invested around USD $386 billion in infrastructure from 1990 to 2017, according to World Bank data[1]. The country has deep and broad experience in utilising PPP procurement and the Brazilian Government continues to prioritise infrastructure investment and encourage private sector participation.
Yet despite having the largest market for PPPs in Latin America, the Global Infrastructure Hub’s (GI Hub) Global Infrastructure Outlook forecasts that Brazil has the third largest infrastructure investment deficit in the world, behind the US and China.
Current trends indicate that Brazil invests only 56 per cent of what is needed in infrastructure. To close this investment gap and keep pace with economic and population growth, Outlook forecasts that an investment of $USD 2.7 trillion—or a bit over 4.5 per cent of Brazil’s GDP—in infrastructure is needed between now and 2040. While this investment gap is significant, many successful large economies have shown that this is an achievable level.
Brazil is a large economy with significant pools of private capital and interest from international infrastructure investors. Meeting these higher investment levels will require private, as well as public investment.
Fortunately, the Brazilian Government is aware of both the need for infrastructure and the opportunities.
As of April 2018, 112 infrastructure projects (both at the state and federal level) with a combined value of more than USD $53.1 billion are being promoted on the GI Hub’s Global Infrastructure Project Pipeline. Several sectors are represented including projects in energy, roads, railways, ports, airports, telecommunications, urban mobility, construction, tourism and many others.
These projects are actively promoted as part of Brazil’s national and sub-national infrastructure plans in order to increase planning transparency and facilitate the participation of foreign investors.
The pipeline is a positive step forward in creating an attractive environment for private involvement and investment in Brazilian infrastructure. It’s encouraging that a number of sub-national governments such as São Paulo, Bahia and Piauí states and the municipality of Porto Alegre and São Paulo have established PPP programs and are actively leveraging this method of procurement.
The existence of a robust project pipeline demonstrates that the country has undertaken significant planning, review, and prioritisation of projects to address its future infrastructure requirements.
[1] Private Participation in Infrastructure Database. The World Bank. https://ppi.worldbank.org/snapshots/country/brazil
