BRASILIA (Reuters) – Brazil’s Economy Ministry has drawn up plans for a low-risk pipeline of infrastructure projects to attract private-sector investment as its blueprint to help kickstart the economy’s post-crisis recovery.
According to an internal document seen by Reuters, Economy Minister Paulo Guedes and team are banking on the huge global injection of liquidity tempting long-term investors to bet on Brazil, as long as there are attractive options to do so.
The plan, finalized on April 28, aims to forge partnerships with state-owned banks and multilateral lenders to lay the groundwork for re-opening and accelerating the development of concessions that have been put on ice due to the crisis. It will be presented to the crisis committee set up by the president’s chief of staff.
The plan would appear to be a counterpoint from Guedes to the governments “Pro-Brazil” program, announced last month, calling for more state spending on infrastructure, mining, energy and regional development.
That announcement – with the conspicuous absence of Guedes – sparked speculation that he had lost influence.
Based on an estimated need for infrastructure investment in Brazil of some 1.4 trillion reais ($250 billion) over the next five years, the Economy Ministry proposes just 5.1 billion reais be spent by 2023 to prepare projects for private investment, according to the document.
Setting up such projects has traditionally been a stumbling block in Brazil, especially in less developed states and cities.
Due to the government’s fragile finances, the funds would come from public banks such as development bank BNDES and Caixa Econômica Federal, as well as multilateral agencies such as the Inter-American Development Bank and World Bank.
(Reporting by Marcela Ayres; Writing by Jamie McGeever; Editing by Cynthia Osterman)
