Local Currency Financing of the Year – EcoRioMinas Road Concession

Securing long-term financing in local currency has always been a litmus test for innovation and execution in Latin America’s infrastructure markets. The winner of this year’s Local Currency Deal of the Year set a new benchmark in doing precisely that. 

In March, toll road group EcoRodovias and its financial partners raised a record-setting R$8 billion to finance the Ecovias Rio Minas concession, which covers 727 kilometers of highway linking Rio de Janeiro with Minas Gerais, two of Brazil’s wealthiest states. The transaction, the second-largest highway financing ever carried out in Brazil, provided the long maturities and structural innovations needed to upgrade one of the country’s most strategic logistics corridors.

The financing was anchored by BNDES, which underwrote R$6.2 billion of project bonds in what the market has dubbed a “finenture.” EcoRodovias also issued R$675 million of incentivized debentures placed in the open market, offering tax benefits for investors and extending maturities beyond 20 years—unthinkable in Brazil’s capital markets until recently. “We developed discussions with BNDES to devise an innovative structure, and we were able to share project risks with lenders,” says Andrea Fernandes, corporate finance officer at EcoRodovias.

Additional support came from a R$614 million loan from BNDES, a R$500 million credit line from Banco do Nordeste (BNB), and R$2.5 billion in completion guarantees. In total, the package blended Brazil’s three pillars of infrastructure finance—development banks, capital markets and commercial banks—into a model that is now seen as replicable for future concessions. The outcome: debt tenors stretching to 23 years, providing a repayment horizon that aligns with long-term cash flows from toll revenues.

The scale of the concession underscores the complexity of the financing. Nearly 500 kilometers of the roads under Ecovias Rio Minas management were single-lane highways prior to the deal. Improvements will duplicate more than 300 kilometers, add new lanes and marginal roads, and modernize safety and tolling infrastructure. By strengthening connections between Brazil’s Southeast and Northeast, the project enhances trade flows in food, timber, meat and fertilizers, while directly benefiting historically underserved regions within BNB’s development footprint.

Fernandes notes that a key part of negotiations involved convincing lenders that costs could be contained through operational efficiencies, including fully automated toll payment systems. BNDES will disburse funds gradually over an eight-year construction period, matching the project’s investment cycle. “When it comes to long-term investments, BNDES conditions continue to be very competitive,” she says. The 23-year repayment profile spreads obligations well beyond the CAPEX phase, which Fernandes adds makes the project more attractive to investors.

The structure also broke new ground in sustainable finance. A R$540 million tranche was issued as a Transition Bond aligned with ICMA’s Climate Transition Finance Handbook. Proceeds will fund renewable energy projects, energy efficiency, natural resource management and clean transport initiatives. EcoRodovias plans to use reclaimed asphalt pavement to cut CO₂ emissions and will invest in solar plants, LED lighting, electric charging stations and more than 50 wildlife crossings. The company will publish annual reports on use of proceeds and impact metrics, with verification from DNV.

The financing was crafted under challenging macroeconomic conditions, with high interest rates and post-pandemic cost inflation driving project CAPEX to R$13.7 billion. Structurers addressed uncertainties over traffic forecasts and operating expenses by introducing base and performance scenarios, contingent credit lines, and backstop facilities. These features reduced completion guarantees to just 30% of the financed amount—low by sector standards—while incentivizing future refinancing on better terms once the project is de-risked.

Despite the hurdles, the deal drew strong investor demand, including retail participation in the incentivized debenture. For the sponsors, the structure optimized equity commitments and delivered higher-than-expected leverage. For policymakers, it showed that capital markets can be integrated into long-term infrastructure finance alongside development banks. And for EcoRodovias, it secured the funds needed to deliver a transformative logistics project that combines economic efficiency, environmental stewardship and social impact.

As Fernandes reflects, “the fact that repayments will be spread across 23 years, well beyond the investment phase, helps projects such as the Ecovias Rio Minas toll road to become more attractive for investors.” That appealwas borne out in a transaction that sets a new benchmark for Brazil’s infrastructure finance market.

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Local Currency Financing of the Year

EcoRioMinas Road Concession

R$7.3bn incentivized debentures; R$663m loan

Sponsor: Ecorodovias Concessões e Serviços

Joint Bookrunners: Bradesco BBI; BNDES; BTG Pactual

Financial Advisor: Bradesco BBI; BTG Pactual

Lender: BNDES

Sponsor’s Counsel: Mayer Brown, Tauil & Chequer

Lender’s Counsel: Machado Meyer

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com