Brazil seeks to drive foreign investors to its road projects

Brazilian Transport Minister Renan Calheiros Filho said he aims to attract new foreign investors to bid in auctions for 35 new highway contracts to be held over the next three years.

“We need to attract new players and foreign investors, as well as bring others back to the market,” he said during a BTG Pactual conference this week.

Brazil intends to hold one road auction per month from April, although an industry source told LatinFinance that this may be wishful thinking.

“If they manage to complete a third of them, this will good enough,” the source said.

Between 1995 and 2022, 22 contracts were awarded, the source added.

Last year, Brazil held four toll road auctions and one of them did not attract any bidders.

But now, things may be different.

Filho said Arteris, a joint venture between’s Spain Abertis and the Canadian investment fund Brookfield, had not been able to invest in Brazil anymore because of contract disagreements.

“But thanks to contract revisions, it will now be allowed to invest BRL40 billion ($8 billion) and return to the market,” Filho said.

The French infrastructure group Vinci Concessions is among the potential bidders for the contracts, according to industry sources.

AN INFRASTRUCTURE SUPER-CYCLE?

The Brazilian infrastructure companies CCR and EcoRodovias dominate the highway market in the country, but Brazilian investment funds like Pátria and Perfin have recently invested in toll roads. Pátria has joined forces with the Singaporean investment fund GIC and the Saudi sovereign wealth fund Public Investment Fund in projects.

“We are considering all opportunities,” said Marcello Guidotti, CEO of  EcoRodovias, which is committed to invest BRL8 billion this year.

Miguel Setas, CEO of CCR, said Brazil is in the midst of a “super-cycle of infrastructure investment.”

Electricity, transport, water and sanitation, telecommunications, he said, accounted for BRL213 billion in investment last year. “It means an acceleration, a 20% increase compared to 2022 in terms of infrastructure investment,” Setas said. “So we do see this super-cycle  taking shape.”