Recently created government fund for secured infrastructure projects in Brazil

The other day a foreign investor who was looking into potential infrastructure projects in Brazil asked me whether the Brazilian Government makes use of Sovereign Guarantees, Bank Guarantees and/or SBLC’s to attract and secure foreign investors (ment).

At least for infrastructure, I believe the most suitable instrument would be the Brazilian Law 12.712/2012, Art. 32, which establishes the Infrastructure Guarantee Fund (or FGIE, Fundo Garantidor de Infraetsrutura).

This fund is managed by the Brazilian Guarantee Agency (or ABGF, Agência Brasileira Gestora de Fundos Garantidores e Garantias S.A.) and is operated through guidelines which regulate the direct guarantee awards (Regulamento de Operações para Outorga de Garantia Direta Pelo Fundo Garantidor de Infraestrutura), meant to offer risk coverage for noncompliance of pecuniary obligations assumed by the public partner in Public-Private Partnerships.

As of its latest report made publicly available (December 31st, 2017), this fund comprised the value of R$ 568.560.446,00 in total net assets (approx. USD 156.043.574,93 today; not very large due to its recent establishment), and applicable to specific concession operations including the following:

I – Major infrastructure projects included in the Growth Acceleration Program (or PAC, Programa de Aceleração do Crescimento) or strategic programs defined by the Executive Branch;

II – Projects resulting from Public-Private Partnerships in the form of Law 11.079/2004.

However, the exact answer to this question depends heavily on the sort of infrastructure project, value and nature of partnership sought in the country, amongst other specifics.

Accelerating Energy Efficiency: Policy Briefs for the 2018 High Level Political Forum

The High Level Political Forum on Sustainable Development meets annually in July, under the United Nations Economic and Social Council (ECOSOC), where countries present their Voluntary National Reviews (VRNs) of the Sustainable Development Goals (SDGs). The HLPF also carries out thematic reviews of progress on the SDGs including cross-cutting issues. To facilitate an in-depth review of progress, the HLPF annually discusses a particular set of SDGs and their interlinkages. In 2018, the in-depth review will be carried out over SDGs 6, 7, 11, 12 and 15, as well as 17, which is reviewed annually.

As a Major Group Consultative Member for the ECOSOC Civil Society Network, my cooperative efforts are particularly focused on the private-public dialogue over policy briefs contained within the new publication “Accelerating SDG 7 achievement: Policy briefs in support of the first SDG 7 review at the UN High-Level Political Forum 2018”. The document was launched by the SDG7 Technical Advisory Group, in partnership with UN DESA (United Nations Department of Economic and Social Affairs) and includes 27 policy briefs relating to accelerating SDG 7 achievement.

Policy Brief #6 Energy Technology Innovation: Digitalization of Grid Services. Increasing the speed of digitalized technology development could lead to a first-mover advantage for pioneering countries or companies.

  • The need for resilient infrastructure, increasing stress on resources, and decentralized supply) and enabled by the interaction of various disciplines such as data and information networks. As the rate of interlinkages increases and improvements in data and information networks accelerate, we can expect rapid advances in the innovations that exploit the interactions of these technologies.
  • Technology such as sensors, robotics and advanced analytics, which together form advanced interconnected systems capable of quickly analyzing large amounts of data, are developing potentially transformative solutions, across various sectors, for improving energy efficiency and managing more variable renewable energy. This development is driven by continuous improvements, and the cost-performance curve of core digital technology building blocks: computing power, data storage, and bandwidth utilization.

Policy Brief #14 Interlinkages Between Energy and Sustainable Cities: Smart Grid and Smart Buildings. Cities are adopting more energy efficient policies and practices in the transport, buildings, industry, and commercial sectors.

  • The number of energy efficient building codes adopted by countries, and by-law at city levels, has increased in the last five years.
  • Smart grids are enabling major energy efficiency and resilience gains. Using ICTs, the grid is able to manage energy demand and use most efficient energy source on the system.

The formal session to review SDG7 will take place on 10 July from 11:00 to 13:00, during the HLPF 2018 and Side Events sponsored by Member States, UN system and other intergovernmental organizations, Major Groups and other accredited stakeholders will be held in the margins of the event. More information on the HLPF 2018 can be found here.

Brazil investments in its Infrastructure and transportation system

One of the greatest development challenges for Brazil lies in its infrastructure; be it its communication, information technology, energy, civil construction or transportation systems. Financial resources is available like never before, high end technology is today offered by national and foreign intelligence production and services organizations, and public policies are strategically steaming for economic growth.

But Brazil is a culturally complex nation. Its vast territory and historical colonization process, and later dictatorial government have led the country into a corrupt political structure and society. And here is where foreign investor might find hardest to deal with, when looking for good investment opportunities. Younger generations strive for better educational and health systems, higher quality of life, and higher standards for moral and ethical values, but they are still very much conducted by a misleading and alienating mass media, along with a limited communication system.

In shorter words, it is my advice to foreign investors to hire highly qualified and ethical professionals for assistance in their business deals in the country. Hence my passionate approach to International Relations in Brazil, when in this article I speak about the improvement of its transportation system as indeed one of the top priority issues.

Economic growth means a stronger and more productive industry, and therefore logistics is very necessary for establishing efficient supply and distribution chains. The Ministry of Transportation is the federal governmental institution who coordinates national transport infrastructure expansion and maintenance through the National Department of Transport Infrastructure. Brazil is still highly dependent on its road system for national distribution, which holds the country in a position of a highly expensive and oil dependent internal logistics chain.

There are strong public policies for rail road expansion, urban metro systems, and air and sea ports expansion and improvement calls, and we can see a lot more work getting done nowadays through PAC – Growth Acceleration Plan and growing investments due to the major international events hosting in the near future like the World Cup 2014 and the Olympic Games in 2016.

Bellow is a few official sources for strategic investment planning, available in portuguese (please use google translator for better understanding).