Brazilian Investments Partnerships Program - PPI - July, 2020 27.07.2020
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Brazilian Investments Partnerships Program – PPI Scan the QR code to access the projects portfolio July, 2020
Brazil in the world 5th largest 9th largest economy: 5th largest population: land area: USD 1.9 trillion GDP 210.1 million people 8,515,767 km² 8th largest consumer 4th largest FDI One of the main global market: household destination in 2019: producers and exporters consumption expenditure USD 78.59 billion (44% of of iron ore, soy bean, equals 63% of GDP: Latin America’s total FDI animal protein, coffee, USD 1.2 trillion inflow) machinery and aircraft USD 1 = BRL 4.35 (February, 2020)
Brazil’s Economic Recovery Ministry of Economy/Brazilian Central Bank data 3
Reforms The path for economic recovery Pension Reform Infrastructure Reform USD 200 billion to be saved in More legal certainty, the next 10 years, limiting transparency and privileges predictability for domestic and foreign investors Administrative Reform Tax Reform Streamlining civil service to Simplifying the tax system bring more efficiency to boost economy
Pro-Investment Bills: The path for economic recovery • Bill 4162/2019 – New Legal Framework for Sanitation • Bill 6407/2013 – New Gas Market • Bill 5877/2019 – Privatization of Eletrobras • Bill 232/2016 – Modernization of the Electric Power Sector • Bill 3178/2019 – Oil and Gas Production-Sharing Agreement (PSA) • Bill 7063/2017 – Concessions and PPPs • Bill 261/2018 – Railways Authorization • Bill 3729/2004 – Environmental Licensing • Bill on Cabotage (New) • Bill on Correios [The National Post] (New)
PPI Council President and Ministers Economy Presidency of the Republic Executive Office Infrastructure Mines and Energy Ministry of Economy Environment Regional Development Secretariat of Government PPI Council Federal Banks BNDES Caixa Econômica Federal Special Secretariat of PPI Banco do Brasil The PPI Council President is the Minister of Economy. The Special Secretary serves as the Executive Secretary of the PPI Council.
PPI works as a hub for investments National and international investors Sectorial Sectorial Ministries Unions Adds on efficiency and value to the process Financial Regulatory Agents Agencies (banks, investment Governance, coordination, funds, etc) monitoring and oversight Transparency, dialogue, Legislative Branch PPI Multilateral Organizations credibility and predictability Well-designed projects Control Concessionaries Technical and legal framework Entities enhancement Licensing Embassies Entities Subnational Governments
PPI IN FIGURES ACCOMPLISHED AUCTIONS/BIDS AND PROJECTS Accomplished Concession Qualified auctions/bids Investments fees/Bonuses projects and projects USD 162.9 billion USD 32 billion 336 178 (BRL 708.7 billion) (BRL 139.3 billion) USD 1 = BRL 4.35 (February, 2020)
PPI 2019 – Main Achievements
36 auctions were carried out in 2019 Investment Concession Expectations fees/Bonuses USD 103 bi USD 20.8 bi
36 Auctions carried out in 2019 Mining 1 auction Palmeirópolis (Auction 10/21) Ports Railway 13 auctions 1 auction Investments: USD 58.6 million 11 Terminals of liquid bulk North-South Railway (FNS) (Auction 3/18) Concession Fee: USD 3.44 million • 3 in Cabedelo/PB (Auction 3/22) Investments: USD 625.2 million Oil and Gas • 1 in Vitória/ES (Auction 3/22) • 5 in Belém/PA (Auction 4/5) Concession Fee: USD 625.2 million 4 auctions • 1 in Vila do Conde/PA (Auction 4/5) • 1 in Santos/SP (Auction 8/13) Highway Regular Offer (Auction 9/10) 1 auction Bonus: USD 5.05 million 1 Terminal of paper pulp in Paranaguá/PR (Auction 8/3) BR-364/365/GO/MG (Auction 9/10) 1 Terminal of Solid Bulk in Santos/SP (Auction 8/3) Investments: USD 473.5 million Round 16 under the concession agreement (Auction 10/10) Concession fee: lower toll fee (33% discount) Bonus: USD 2.04 billion Investments: USD 241.3 million Concession Fee: USD 187.5 million Airports Petrobras Transfer of Rights Surplus (Auction 11/6) 12 assets Bonus: USD 16.07 billion Energy 12 airports in 3 clusters (Auction 3/15): 3 auctions Northeast: Round 6 Production Sharing Agreement - PSA (Auction 11/7) Recife/PE; João Pessoa ,Campina Grande/PB; Generation Maceió/AL; Aracaju/SE; and Juazeiro do Norte/CE • New Energy A-4 (Auction 6/28) Bonus: USD 1.16 billion Midwest: • New Energy A-6 (Auction 10/18) All in MT: Várzea Grande (Cuiabá), Alta Floresta, Barra Total Bonus: USD 19.3 billion Transmission do Garças, Rondonópolis and Sinop. • 12 lots of transmission lines Total Investments: USD 96.38 billion Southeast: Vitória/ES and Macaé/ RJ Investments: USD 3.97 billion Lotex Investments: USD 809 million 1 auction (10/22) Auction fee: lower power tariff Concession fee: USD 546.3 million 11 Concession Fee: USD 187.9 million
PPI Main Deliveries (Jan-Jun/2020)
From January to June/2020, 5 assets were delivered Projected Concession investments fees/Bonuses USD 2.11 USD 505 mi bi Highway Railway BR-101/state of Santa Catarina Early extension of Rumo Malha Paulista’s concession agreement Investments : USD 781 million OPEX: USD 919 million Investments: USD1.32 million Auction criterion: lowest toll tariff Concession fee: USD 505 million Total discount: -62% Auction on February 21 Amendment signed on May 27
Current PPI Portfolio
Current PPI Project Portfolio 158 PROJECTS + 13 policies Ports – 35 Railways– 11 Supply – 5 Energy – 14 Tourism – 4 4 Privatizations 30 Port Terminals: 4 concession renewals 2 Privatizations 2 Transmission Lines Auctions 4 Concessions of national 1 Waterway (Licensing) 2 new concessions (CEASAMINAS and CEAGESP) 2 Privatizations (Eletrobras and heritage historical sites in 4 investments in strategic 8 Fishery Terminals Nuclep) PB, PE and SP states Defense and Security railway networks (Cabedelo, Belém, Manaus, Aracaju, TL Manaus-Boa Vista (PPP’s) - 2 Natal, Santos, Cananeia and Vitória) 1 privatization 5 Licensings 1 Air force 2 Existing Energy Generation Policies: Communications Airports – 24 National Parks and • “Sea road” - Cabotage (A-4 and A-5) 1 Police Communications Forests - 11 • TRIIP (Road passenger 2 New Energy Generation (A-4 22 airports in 3 clusters 8 concessions of parks (Lençóis and A-6) transport) Economy – 5 2 rebids Maranhenses, Iguazu Waterfalls, • PPP daycares 4 Privatizations (ABGF, Jericoacoara, Aparados da • PPP prisons + correctional Serra/Serra Geral, Canela, São Mining – 5 EMGEA, Serpro and Dataprev) Highways – 20 facilities Francisco de Paula, São Joaquim e 1 Lottery (Fixed ratio) Brasília) 4 CPRM Mining Rights • Universalizing basic 11 Concessions 3 concessions of forests ANM Available Areas 2 Feasibilty assessments sanitation + solid waste (Humaitá, Iquiri and Castanho) (8,370 km) Communications and • PPP street lightening Oil and Gas – 3 7 Licensings Technology – 5 • The “projects factory” Regional Development – 4 Round 17 under the concession • Tourism agreement Health – 2 H 2 privatizations (CBTU and 3 Assessments for Privatization • UBS (health basic units) Shale Gas Fracking (Env. Trensurb) (Telebras, National Post, and EBC) • BidSim – Oil Auctions Licensing) 1 Assessment (Hospital Fêmina/Porto Alegre) 2 assessments (PISF and Irrigation 1 Privatization (Ceitec) • Strategic minerals Open Acreage Irecê) 2 Blocks of ToR+ 1 PPP (Hospital Guarulhos/SP) 1 Concession (5G)
Boa Vista Airports São Luiz Tabatinga Manaus Imperatriz Tefé Cruzeiro Teresina do Sul Petrolina Rio Porto Velho Branco Palmas Central Block 7.4 million pax/year North Cluster Goiânia USD 495 million in investments 4.6 million pax/year USD 385 million in investments Londrina Curitiba 22 Airports (3 clusters) : Round 6 Foz do Iguaçu Bacacheri Investments USD 1.54 billion Navegantes South Joinville Block Uruguaiana 2 Airport Rebiddings: 12.2 million pax/year Bagé Natal/RN and Campinas/SP Pelotas USD 665 million in investments
FICO Mara Rosa/GO a Água Cross- Railways Boa/MT 383 km Investment Inv.: USD 627.5 million Ferrogrão Sinop/MT to Miritituba/PA 933 km Inv.: USD 5 billion (under EFC New assessment) 892 km Inv.: USD 1.8 Concessions billion FIOL FCA Ilhéus/BA a Caetité/BA 7,215 km 537 km Inv.: under Inv.: USD 758 million assessment EFVM Renewals 895 km Inv.: USD 2 Railways Portfolio billion USD 13.5 billion MRS Investments • new – USD 5.7 billion 1.686 km Inv.: USD 3.8 • renewal – USD 7.8 billion billion 12,789 Km: • new – 1,470 km Total Length • renewal* – 11,071 km Norte-Sul • privatization: 248 km (FNS) 1.537 km Inv.: USD 620 17 million
Railways • Ferrogrão (Grain Railway) - EF170/MT/PA Section between Sinop/MT and Miritituba/PA • West-East Integration Railway (FIOL) • Length: 933 km + the section of Santarenzinho (32 Section between Ilhéus/BA and Caetité/BA km) and Itapacurá (11 km) • Length: 537 km • New railway corridor to export grains through the • It will allow the iron ore produced in the Caetité/BA North Region, which aims at improving the outflow region and the grain output of the West of Bahia to be of the Midwest agribusiness output by connecting it exported through the South Port, a port complex to be to the port of Miritituba, in the state of Pará. built close to the city of Ilhéus/BA. In the future, it is also possible to establish a connection between the • Estimated cargo: 25 million tons in 2020 and 45 million South Port and the North-South Railway (FNS). tons in 2050. • Projected investment: USD 758 million, out of which • Projected investment : USD 5 billion (USD 1.9 billion USD 368 million are earmarked to accomplish the upfront and USD 3.1 billion during the contract term) works • IRR: 11.04% • IRR: 11.04%
BR-135/316/MA 438 km Entr. BR-135 (via Pedrinhas) – Entr. Itaqui/Bacanga; Highways Acess to Tirirical Airport – Entr. BR-316(B) (Peritoró); Entr. BR-135(B)/MA-020 (Peritoró) – Entr. BR- BR-163/MT and BR-230/PA 226(B)/343(A) (Div. MA/PI) (Teresina/Timon) BR-158/MT/PA 970 km 1,135 km Section between Sinop/MT and Ribeirão Cascalheira/MT and Miritituba/PA Marabá/PA BR-153/080/414/GO/TO 850.7 km Section between Anápolis/GO and Aliança do Tocantins/TO BR-116/493/RJ/MG (CRT) 711 km Section of BR-116/RJ Section between Além Paraíba/RJ and BR-040/MG Concession of 7,238 km BR-381/MG and BR-262/MG/ES - of highways 672 km Section of BR-381/MG between Belo Rebidding Horizonte/MG and Gov. Valadares/MG Section of BR-262/MG/ S between João BR-040/DF/GO/MG – Monlevade/MG and Viana/ES Highways Portfolio 936.7 km Section between Brasília/DF and BR-040/495/MG/RJ (Concer) Investments USD 34.7 bi Juiz de Fora/MG 211 km Section between Juiz de Fora/MG and Total Length 18,377 km Integrated Highways Rio de Janeiro/RJ of Paraná state – New Concessions 9,067 km 4,114 km BR-116/465/101 /SP/RJ (Dutra) 598.5 km Assessments + 8,373 km BR-470/282/153/SC Auctions accomplished: Section between Rio de Janeiro/RJ and São Paulo/SP 502 km BR 101/290/448/386/RS Section between Rebidding 936.7 km Navegantes/SC and the BR- 364/365/GO/MG frontier RS/SC BR-101/SC
Highways – next auctions (2020) Highway Length Capex (US$) Auction BR-153/080/414/GO/TO 850 km 1.95 billion 2020/Q4 • Road section between Anápolis/GO and Aliança do Tocantins/TO BR-163/MT and BR-230/PA 970 km 436 million 2020/Q4 • Road section between Sinop/MT and Miritituba/PA BR-381/MG and BR-262/MG/ES • Road section of BR-381/MG between Belo Horizonte/MG and Gov. 672 km 2.25 billion 2021/Q1 Valadares/MG • Road section of BR-262/MG/ES between João Monlevade/MG and Viana/ES BR-116/465/101 /SP/RJ (Dutra) 598.5 km 3.90 billion 2021/Q1 • Road section between Rio de Janeiro/RJ and São Paulo/SP BR-470/282/153/SC 502 km 1.83 billion 2021/Q2 • Road section between Navegantes/SC and the frontier RS/SC RODOVIAS INTEGRADAS DO PARANÁ (BR- 153/158/163/272/277/369/373/376/476/PR and relevant state-level 4,114 km 7.72 billion 2021/Q3 highways) BR-116/493/RJ/MG (CRT) 711 km 1.81 billion 2021/Q3 • BR-116/RJ and Além Paraíba/RJ to BR-040
Santana/AP (1) Vila do Conde/PA (1) Liquid bulk Liquid and solid bulk Ports Itaqui/MA (4) Liquid bullk Fortaleza/CE (2) Passengers and vegetal bulk Areia Branca/RN (1) Sea salt Maceió/AL (4) Liquid and vegetable bulk Aratu/BA (2) Solid bulk Porto de Vitória/ES - CODESA Paranaguá/PR (3) Vehicles, General cargo and Liquids Porto de São Sebastião/SP Ongoing Ports portfolio Santos/SP (4) Investments USD 3.65 billion General Cargo/Celullose Liquid bulk/fuel Port leasings 22 Port of Santos/SP – CODESP Port privatizations 4 Port of Itajaí/SC
Ports - Privatizations Port of Santos/SP (CODESP) Port of Itajaí/SC Status: Feasibility assessments Status: Feasibility assessments Delivery and approval of Bidding Notice: : 2022/Q2 Assessments: 2021/Q1 Auction: 2022/Q3 Public Hearing: 2021/Q2 Investments: under assessment Investments: USD 2.42 billion Port of Vitória/ES (CODESA) Port of São Sebastião/SP Status: Feasibility assessments Status: Feasibility assessments Bidding Notice: 2021/Q3 Bidding Notice: : 2022/Q1 Auction: 2021/Q4 Auction: 2022/Q2 Investments: USD 230 million Investments: USD132 million 22
Fishery Terminal of Fishery Terminals Manaus (AM) A Public Fishery Terminal (PFT) is the structure Fishery Terminal of necessary for fish handling and storage activities, Belém (PA) trading post, fish processing and support for vessel navigation. Fishery Terminal of Making PFTs operational is crucial for the provision of Natal (RN) an adequate phytosanitary environment, therefore for the development of the fish industry. Fishery Terminal of Cabedelo (PB) The PFT area can include facilities such Fishery Terminal of as anchorages, docks, wharves, Aracaju (SE) berthing bridges and piers, cold storage warehouses, buildings and Fishery Terminal of infrastructure for protection and Vitória (ES) waterway access. Fishery Terminals of Santos e Cananeia (SP)
Fishery Terminals Qualification in Public TCU* Bidding Assessments Auction Contract PPI Hearing Approval Notice Completed Completed Completed Cabedelo (PB) Q3/2020 Q3/2020 Q4/2020 Q4/2020 (2/18/2020) (5/11/2020) (6/11/2020) Belém (PA) Completed In progress Q4/2020 Q1/2021 Q2/2021 Q2/2021 Q3/2021 Manaus (AM) (2/18/2020) (Q4/2020 ) Natal (RN) Aracaju (SE) Completed Vitória (ES) Q4/2020 Q1/2021 Q2/2021 Q3/2021 Q4/2021 Q1/2022 (6/10/2020) Santos (SP) Cananéia (SP) TCU: Portuguese acronym for the Brazilian Federal Court of Accounts
Mining Kaolin - Rio Capim/PA Phosphate - Miriri/PB Copper - Bom Jardim/GO Mining legal rights Investments USD 319 million + 56,000 available areas in the National Mining Agency portfolio Coal - Candiota/RS
Oil and Gas Round 17 Open Acreage Potiguar Basin Transfer of rights Data Capacity 96 blocks (offshore) Round 17 Basins (4) Potiguar, Campos, Santos and Pelotas Capacity 740 blocks (onshore and offshore) Minimum bonus USD 666 million Open Acreage for all blocks Campos Basin Bidding Notice for Transfer of rights July/2020 the 2nd cycle (tbc) Santos Basin Blocks (2) Sépia and Atapu Transfer of Bônus mínimo para USD 8.4 USD 5.25 billion (Sépia) Pelotas Basin Rights os blocos billion USD 3.15 billion (Atapu)
Electric Power Energy portfolio (values in USD billions) License + Implementation of the Transmission 0.413 Line Manaus – Boa Vista Existing Energy Generation (A-4 and A-5) 2.16** New Energy Generation (A-4 and A-6) 3*** Transmission (nº 1/20 and nº 7/20) 1.4 Transmission Auctions nº 1/20 * Total 6.98 Transmission Line – * Projection based on the replacement of 100% of the contracts due in 2024 and 2025, through greenfield plants Manaus/AM -Boa Vista/RR ** Reference based on the results of A-4 and A-6 auctions, held in 2019
Privatization/Capitalization – Eletrobras - Brazilian Power SOE Power generation capacity: 51,143 MW Generators (total): 125 plants (58 Corporate and 67 SPEs) Hydropower : 46,259 MW Nuclear Power: 1,990 MW Thermal power (other technologies): 1,870 MW Wind and Solar: 1,025 Transmission Lines: 71.154 km (64.894 km, voltage > 230 kV) Direct and indirect shareholding of the Brazilian Government CS – 72.22% o Features: holding comprising Eletrobras CGT Eletrosul; Eletrobras Chesf; Eletrobras Eletronorte; Eletrobras Eletronuclear; Eletrobras PS – 6.52% Furnas; and direct and indirect shareholding in 136 Special Total – 61.69% (Source: Eletrobras Financial Statements – 2019) Purpose Vehicles (SPVs). o Grantor: Ministry of Mines and Energy Status: Awaiting bill 5877 / 2019 approval o Bill 5877/2019 establishes guidelines for privatization by capitalization o Privatization model: increasing social equity by issuing common shares
Auction on 5G technology • Grantor: ANATEL Most important auction on radio frequency spectrum ever held in Brazil, due to the amount of spectrum to be offered – four • Preliminary investment estimates + concession fees: USD 4.6 billion times the total currently available for mobile networks in the country – and the diversity of options, as the spectrum will be • Expected date for the auction: March / 21 made available in four different frequency bands. • Public Hearing concluded in 4/17/20 • Next steps: Technical Pricing Assessment of the object and commitments of the bidding 26cobertura GHz e notice in progress Alta700 MHz cobertura e Baixa2,3 GHze Baixa3,5 cobertura GHze Baixíssima cobertura baixa20 Capacity MHz alta Capacity 90 MHz 400 MHz alta Capacity’ 3200 altíssima MHz Capacity • Contract Term: 20 years (with the exception Tudo quelow existe disponível of the 700 MHz band with a term until Wide coverage 4x Low coverage and Low coverage and Very coverage and and low capacity high capacity high capacity parathe serviços highestmóveis capacity 12/8/2029 and an extension under the terms in force at the time) Everything available for 4x mobile services
National Parks National Park of Lençóis Maranhenses (MA) National Park of Jericoacoara (CE) National Park of Brasília (DF) National Park of Foz do Iguaçu (PR) National Park of São Joaquim/SC National Park of Aparados da Serra (RS) and Serra Geral (SC)
Concession of Forests for recreation Canela (RS) São Francisco de Paula (RS)
Concession of forests Brazil has the largest tropical forest and the The National Forests of Iquiri, Humaitá and 2nd largest forest area Gleba Castanho, all in the State of Amazonas, Gleba Castanho in the world have been qualified at the 12th meeting of the PPI Council – Status of national priority. Floresta Nacional de Payments to the Federal Government by the Floresta Nacional Humaitá concessionaires are destined to the states de Iquiri and municipalities where the forests are located, to the National Fund for Forestry Development and to ICMBio - Chico Mendes Institute for Biodiversity Conservation. Computerized system for managing concession contracts. Procedural manuals for sustainable management. Greater preservation of forests, less deforestation, less fires, greater control and a better fight against illegal activities.
The Stages of a Forest Concession
Contracting of Federal Court Project Assessments Public Hearing Bidding Notice Auction assessments of Accounts Aparados da Serra e Serra Geral Canela São Francisco de Paula São Joaquim Brasília Foz do Iguaçu Jericoacoara Completed In progress Lençóis Maranhenses
National Heritage Sites The Forts of Nossa Senhora dos Remédios and Orange, located in the State of Pernambuco; the Fortress of Santa Catarina (PB) and the Farm Pau D`Alho (SP) were qualified in PPI portfolio for concession of their usage/management, under the Fortress of Santa Catarina policy for attracting private investments in the João Pessoa (PB) tourism sector. These projects will be pilots of Fort Nossa Senhora dos Remédios the so-called Program “Revive Brasil”, Fernando de Noronha (PE) which was born out of a Brazil- Portugal cooperation protocol signed by the Ministry of Tourism, and whose objective is the concession of vacant historical/cultural heritage sites. Fort Orange Ilha de Itamaracá (PE) Farm Pau D’Alho Campinas (SP)
PISF – Project for integrating São Francisco river into the water basins in the north part of the Northeast region of Brazil (NE) Features: Assessments for modeling a partnership for the operation and maintenance of the raw water supply infrastructure, aiming to ensure water security for the entitled states. Its main use is human supply and animal drinking, with other uses being admitted. It benefits 12 million people in four States (CE, RN, PB and PE) and 390 cities. The North Axe has 96% of accomplishment and the East Axe 98%. Object of assessments: Operation and maintenance of 477 km of channels; 9 pumping stations; 27 reservoirs in the axes; 4 tunnels; 14 aqueducts; 9 230 kV substations; Installed power 100.5 MW; annual consumption of 709 GWh; Estimated energy consumption 58,300 MWh/month. Pumping operational capacity of 38 m3/s and average annual flow granted: 26.4 m3/s. Model: Common or sponsored concession Brownfield project (under assessment) Executed CAPEX Investments : USD 2.7 billion Structurer: BNDES with MDR, ANA, SPPI e Projected OPEX Investments: USD 115 million/year SDI/Ministry of Economy. Contract period: 35 years Grantor: Brazilian Federal Government Auction criterion: to be defined Sector Ministry: Ministry of Regional Public Guarantees: Infrastructure Guarantee Fund - FGIE Development - MDR and FPE States Regulator: ANA Status: assessments to be completed in December 2020 Regulation: Mechanism defined in the Bidding: June 2021 concession contract
Irrigation Perimeter in Irecê/BA Features: Assessments of alternative partnerships for concession aimed at harnessing the hydro- agricultural potential of the area. Comprises investments for implementing, operating, maintaining and improving management. Project surface: 47,924 hectares for irrigation in the cities of Xique-Xique and Itaguazu, central region of the state of Bahia - São Francisco river basin. Object of assessments: Exploiting irrigated agriculture in order to accomplish infrastructure works (channels and water pumping stations) in the area of Stages 2 to 9, and operating and maintaining the entire project`s infrastructure for Shared Usage (Stages 1 to 9). Production potential: 16,000 tons of fruit and 83,000 tons of grains per year, only in Stages 1 and 2, with estimates of generation of 120,000 direct and indirect employments (9 stages). Estimated Annual Gross Production Value: USD 202 million/year. Model: Public-Private Partnership of the BR Executed investments: USD 275 million (Pumping Federal Gov jointly with subnational level Station of 10.5 m³/s and 42 km of channels) entities Projected CAPEX investments: USD 156 million Structurer: under assessment with Contract term: to be defined IFC/World Bank. Auction criterion: to be defined Grantor: BR Government/Codevasf Public Guarantees: Infrastructure Guarantee Fund Sector Ministry: Ministry of Regional – FGIE Development - MDR Status: Revision of existing assessments Regulator: None Auction: 2021 Regulation: Mechanism defined in the concession contract
Integrated Communication Network of the Brazilian Air Force Command - PPP Features: The Air Force Telecommunications Network covers the entire Brazilian airspace (territorial waters included), an area of 22 million km2 Object of concession: designing, installing, updating, expanding, operating, managing and maintaining a communications, control and management infrastructure for the Operational Network, Administrative Network, Corporate Network, Telephone Networks, Aeronautical Command Network, Tariff System Data Link, International Links, Network Management Center and Security Management Center integrated through an administrative concession contract. Brownfield project Projected CAPEX investments : USD 354 million Projected OPEX investments : USD 514 million Model: Administrative Concession Contract term: 25 years Structurer: Committee for the Implementation of the Airspace Auction criterion: lowest consideration value per month Control System - CISCEA, with support of FIA - USP. Maximum consideration per month: USD 4 million Grantor: the Federal Government/ CISCEA Public Guarantees: Infrastructure Guarantee Fund - FGIE: value of Sector Ministry: Ministry of Defense - Air Force Command 6 monthly consideration installments; Regulator: None Status: Bidding Notice issue with revised assessments expected for Regulation: Mechanism defined in the concession contract Q1/2021
PPP – Critical Digital Radio Communication for Defense and Public Security Features: Assessments for Modeling the National System for Integrated Critical Digital Radio Communication for Defense and Security of the Federal Government, States, the Federal District and Municipalities. Establishment of a single operator for a national integrated LTE radio communication network, with service levels, availability and encryption compatible with the requirements of the Public Security and Armed Forces. Object of assessments: Structuring of a high capacity trunk backbone network, public and private, for signal transport and convergence of technology and secure communications protocols for critical missions. It must be capable of connecting different technologies and integrating security forces of the Federal Government, States and Municipalities, as well as the Armed Forces, involving common applications. It may include end-use equipment. Diversity of applications and technological transition in an interchangeable platform for data services. It reaches the entire national territory and security and defense organizations using digital radio communication for voice and data traffic on secure and exclusive frequencies, with infrastructure to be shared with other public or private uses with converging standards. Investment made by the Ministry of Justice and its subsidiary bodies of USD 465 million in its own network and equipment. Model: Public-Private Partnership of the BR Federal Projected CAPEX investments: to be defined Gov jointly with subnational level entities Projected OPEX investments: to be defined Structurer: Assessments to be hired by BNDES, in Public Guarantees: Infrastructure Guarantee Fund – FGIE conjunction with MJSP, MD, MCTIC and SPPI. Status: definition of requirements Grantor: the Federal Government Completion of assessments: to be defined Sector Ministry: Ministry of Justice and Public Auction: 2021 Security - MJSP Regulator: None Regulation: Mechanism defined in the concession contract
Fêmina Hospital in Porto Alegre, Rio Grande do Sul State Features: Assessments of partnership alternatives aiming at modernizing and improving public services of a new specialized hospital care unit in an area of the “Conceição Hospital Group”, in the city of Porto Alegre, Rio Grande do Sul State. The initiative involves designing, constructing, installing, maintaining and operating health support services in a new location. Fêmina Hospital, a reference in women’s care for the Metropolitan Region of Porto Alegre, has been in operation since 1956. It has 12,300 m2 of built area, 166 beds and 917 workers. In 2018, the unit performed 126,000 medical consultations, 9,000 hospitalizations, 6,400 surgeries and 2,100 deliveries. The new unit should involve expanding the service, as well as improving the quality of service provision. Object of assessments: Assessments of alternative partnerships to adapt current structures, as well as constructing, renovating and expanding facilities and improving services management. Model: Public-Private Partnership Greenfield project Structurer: Assessments under analysis by BNDES Projected CAPEX Investments: to be defined Grantor: the Federal Government Projected OPEX Investments: to be defined Sector Ministry: Ministry of Health Contract term: to be defined Regulator: None Auction criterion: to be defined Regulation: Mechanism defined in the concession Status: Requirements definition contract Bidding: 2021 Public Guarantees: Infrastructure Guarantee Fund – FGIE
Preliminary estimates: Privatizations USD 12.5 billion Assessments
FEDERAL PRIVATIZATIONS – PERSPECTIVE 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 AUCTIONS - PRIVATIZATIONS LIQUIDATIONS SALE OF SHARES / DELIVERY OF QUOTAS TO THE FEDERAL GOVERNMENT DEBÊNTURES
Privatization – CBTU (Brazilian Company of Urban Trains) Brownfield project Extension: 220.8 Km of operating lines CAPEX projected investments: USD 460 million for requalification OPEX projected investments: to be defined Contract period: 25 years Auction criteria: to be defined IRR: to be defined o Object of concession: public passenger transportation Lease / concession / consideration value/ etc: to be defined services in the states of Alagoas, Minas Gerais, Paraíba, Public Guarantees: to be defined Pernambuco and Rio Grande do Norte Capacity: 567,000 pax / day o Model: Privatization Winning Bidder: to be defined o Structurer: BNDES Concession / Lease / Consideration: to be defined o Grantor: states above-mentioned Status: under assessment o Sector Ministry: Ministry of Regional Development o Regulator: States’ Regulator Agencies Q3/19 Q4/20 Q4/20 Q2/20 Q2/21 Q3/21 Q3/21 Qualification in PPI Assessments Public Audience TCU judgement Bidding Notice Auction Contract signature
Privatization – Trensurb (Urban Trains Company of Porto Alegre S.A) Brownfield project Extension : 43.8 Km of operating lines CAPEX projected investments: USD 80.45 million for requalification OPEX projected investments: to be defined Contract term: 25 years Auction criteria: to be defined IRR: to be defined o Object of concession: public passenger transportation Lease / concession / consideration value/ etc: to be defined services in the State of Rio Grande do Sul Public Guarantees: to be defined o Model: Privatization Capacity: 228,000 pax / day o Structurer: BNDES Winning Bidder: to be defined o Grantor: state of Rio Grande do Sul Concession / Lease / Consideration: to be defined o Sector Ministry: Ministry of Regional Development Status: under assessment o Regulator: Metroplan Q3/19 Q4/20 Q4/20 Q2/20 Q2/21 Q3/21 Q3/21 Qualification in PPI Assessments Public Audience TCU judgement Bidding Notice Auction Contract signature
Postal Service The largest employer in 11,177 post offices USD 4.13 billion Brazil Present in almost all More than 105,000 2018 Net Revenue municipalities in Brazil employees Status: ongoing assessments aimed at evaluating alternatives for partnership with the private sector
Environmental Licensing • Brazil is the most biodiverse country on Earth and that implies a major responsibility. • It counts upon a strong legal framework, which comprises a specific chapter about environmental licensing enshrined in the 1988 Federal Constitution. • Even before the Constitution, Brazil had already established an Environment National Policy (1981), which is still in force. • The main purpose of the policy is making social, economic development compatible with preserving environment quality and ecological balance. • Environmental licensing is a core tool to control and is required for carrying out any activity deploying environmental resources, that, effectively or potentially, bring about environmental degradation
TL Manaus – Tocantins Boa Vista Waterway Rock Dredging Supporting environmental BR-319/AM/RO licensing and BR-242/MT expropriation BR-158/MT BR-174/RO/MT BR-135/BA/MG Shale Gas Fracking BR-080/MT BR-135/MG • site to be defined Hydropower Plants • Castanheira – MT • Telêmaco Borba – PR • Tabajara – RO • Bem Querer – RR • Formoso – MG
The challenge of universalizing basic sanitation • In Brazil, a population similar to that of Canada has no access to clean water • More than 100 million Brazilians have no access to sewage removal and treatment Goals: • Enhancing private partnerships subnational level bodies (an estimate of USD 140 to USD National data 160 billion in investments ) Water supply – 83.5% Sewage removal – 52.4% • Structuring bankable projects to provide Sewage treatment – 73.7% proper services to Brazilians
Sanitation projects State of Amapá State of Ceará São Gonçalo Urban solid waste 4 2.2 million USD 759 million* do Amarante (pilot projects) projects Entitled Projected Teresina Population Investments- Total Consortia Crato Comares 4 497.000 USD 690 million* Basic sanitation State of projects Entitled Projected State of Acre Alagoas population Investments- Total 3 6.5 million USD 2.37 billion São Simão Sewage projects Entitled Projected Consortia Investments- Total population Convale Cariacica Bauru State of 5 18 million USD 9.8 billion Rio de Janeiro Water distribution and Volta Redonda projects Entitled Projected sewage population Investments- Total Urban solid waste - FEP Basic sanitation - FEP Water distribution and Porto Alegre Total 16 projects 27.2 million USD 13.6 sewage - BNDES billion State of Sewage - BNDES Rio Grande do Sul * Capex + Opex
Service bank: emphasis on sanitation (BNDES) Banco de serviços: destaque para saneamento Cariacica / Rio de Janeiro Rio Grande Porto Alegre / Minas Alagoas state Acre state Amapá state Ceará state ES state state do Sul state RS state Gerais state Concession of Concession of Sewage Full concession Full concession Concession of Business water water Sewage Sewage PPP of water and of water and water and/or To be defined Model distribution distribution PPP PPP sewage sewage sewage and sewage and sewage Entitled 1,393 423,000 13,739,000 629,000 742,000 1,890,000 1,479,000 4,173,000 11,330 Population Projected USD 590 mi USD 133 mi USD 7.71 bi USD 371 mi USD 878 mi USD 690 mi USD 345 mi USD 1.54 bi To be defined Investments Auction Auction Auction Auction Auction Auction Auction Auction Next steps To be defined Q3/2020 Q3/2020 Q4/2020 Q1/2021 Q1/2021 Q2/2021 Q2/2021 Q3/2021 For more information: http://saneamento.bndes.gov.br/. Entitled population Total projected investment 36,000,000 USD 12.2 billion
Project in Alagoas: concession for supplying water and sewage services in the metropolitan area of Maceió-AL BRL th Forecast investments 450.000 400.000 350.000 CAPEX 300.000 • USD 588 million 250.000 Water 200.000 • USD 351 million 150.000 100.000 • USD 196 million in 5 years 50.000 Sewage 0 • USD 236 million 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 • USD 125 million in 5 years Água Esgoto Water Sewage Currently: 69.5% of total water supply coverage Currently: 17.6% of sewage removal 43.7% of losses in distribution 17.6% of sewage treatment Project: 100% of coverage in 6 years Project: 90% of coverage in maximum 16 years
Projects in Municipalities – FEP CAIXA – Public Lighting FU Municipalities % executed Date of Auction BA Alagoinhas Not started SE Aracaju** 89 2020 BA Barreiras Not started PA Belém* 83 2020 ES Cachoeiro de Itapemirim 62 2020 BA Camaçari 68 2020 SP Campinas* 84 2020 Structuring assumptions MS Corumbá 12 2021 • Administrative PPP CE Crato Not started • Scope: modernization, expansion, operation and maintenance BA Feira de Santana** 89 2020 • Energy efficiency and less impact on the environment SP Franco da Rocha** 88 2020 • Short term investments, up to 3 years MG Nova Lima 59 2020 • Remote management (main roads) MG Patos de Minas 21 2021 RS Sapucaia do Sul* 88 2020 Supporters Executor: GO Senador Canedo Not started PR Toledo 13 2021 GO Valparaíso de Goiás Not started 2nd CALL OF PUBLIC LIGHTING: *Projects supported by IFC/World Bank under public consultation between January and March/20 - Results released: 46 municipalities and 9 consortia have **Public Notices published in June/20. Auctions in August/2020 at B3 been qualified * Projected CAPEX and OPEX values
FEP – Public Lightening - Belém/PA ▪ Brownfield project ▪ Entitled population: 1.4 million ▪ CAPEX projected investments: USD 30.8 million ▪ OPEX projected investments: USD 20.9 million ▪ Contract term: 13 years ▪ Auction criterion: lower monthly consideration ▪ Maximum amount of monthly consideration: USD 666,000 ▪ # of lightening points: 90,000 o Object: administrative concession to provide public ▪ Status: Public Hearing accomplished lightening services, including the development, modernization, expansion, energy efficiency, operation and maintenance of the municipal network o Model: administrative PPP o Structurer: CAIXA, IFC, Madrona and Accenture o Grantor: the Municipality o Sector Ministry: Ministry of Regional Developement 2019 Q4/20 Q4/20 Q3/20 Q3/20 Q4/20 FEP Contracting Assessments Public Hearing Bidding Notice Auction Contract signature
Public Lightening FEP Projects in the post-public consultation state Projected Projected Lightening Entitled Max.Consideration % of remote Efficiency Term (years) CAPEX – OPEX – (million BRL / year) points population management goal Million BRL Million BRL (thousand) Aracaju/SE* 650,106 13 83,0 70,0 21,0 58 27% 61% Belém/PA 13 134,05 91,63 37,0 90 41% 46% 1,452,275 Campinas/SP 1,204,073 13 185,10 102,40 44,24 120 25% 65% Feira de 614,872 13 80,75 78,79 21,25 60 33% 53% Santana/BA* Franco da 13,60 23,50 4,80 10 15% 65% Rocha/SP* 149,502 13 Sapucaia do 13 23% 66% Sul/RS 139,476 13 14,20 24,90 5,08 *Public notices published in June/2020. Auction to take place in August/2020 in the Brazilian Stock Exchange (B3)
Macapá Public lightening - 40 th 400 th Teresina* 87 th BNDES 800 th Jaboatão dos Guararapes 43 th 703 th Caption - Images Petrolina Number of lightening points 35 th Entitled population Curitiba 340 th 160 th São Caruaru 1.9 mi Gonçalo Caption 31 th 1.1 mi 35m Projects in progress Pelotas 350 th 490m Municipalities under prospective studies 29 th Vila Velha 340th 35 th The data presented here are estimates Vila Velha and should not be used as final data Consórcio 490 th Consórcio Centro Sul Sul Centro Porto Alegre* 30 30m th 105 th 400 th 400m 1.4 mi *Auction accomplished
FEP CAIXA – PROJECTS PIPELINE USD PUBLIC LIGHTING 17 5.1 million 17 322 million* Projects Entitled Entitled Total projected population municipalities investment URBAN SOLID 04 2.2 million 23 759 million* WASTE (PILOT Projects Entitled Entitled Total projected PROJECTS) population investment municipalities BASIC 04 497,000 04 690 million* SANITATION Projects Entitled Entitled Total projected population municipalities investment TOTAL 25 projects 7.8 million 41 1.8 billion* Public lighting Solid Waste Environmental sanitation PARTNERS * Capex + Opex in BRL
PUBLIC CALLS AND PILOT PROJECTS – FEP CAIXA Public Lightening Pilot projects under Bidding Notice Open call progress Dic/2019 Urban solid waste Drainage Registrations closed on 3/6/2020 Municipality of Teresina Bidding Notice published, registrations until Municipality of Porto 65 municipalities registered Alegre 7/15/2020 46 municipalities qualified Call in progress Correctional facilities / 15 consortia registered UNOPS 9 consortia qualified Water supply and State of Minas Gerais State of Santa Catarina Entitled population: sanitation 10.6 bi (municipalities) 1.9 bi (consortia) Bidding Notice expected to be launched in the 2nd half 2020
PPP FEP CAIXA AUCTIONS (2020) Initial Legislative Completed Public Changes Bidding Notice Auction Assessments Assessments Hearing Feira de Santana/BA Aracaju/SE Franco da Rocha/SP Belém/PA Nova Lima/MG Sapucaia do Sul/RS Campinas/SP Camaçari/BA Cachoeiro do Itapemirim/ES Teresina/PI Convale/MG Bauru/SP Crato/CE São Simão/GO
Supporting Subnational level Partnerships Correctional Facilities • Two pilot projects singled out for structuring in Santa Catarina and Minas Gerais states • CAIXA and the United Nations Office for Project Services (UNOPS) support the PPPs structuring • Private partner is responsible for building, maintaining and operating up to 35 years, with standards to meet in quality of service, training and qualification offer
Concession of Subway Line 2 - Metropolitan Region of Belo Horizonte Greenfield project Extension : 10.5 Km of operating lines CAPEX projected investments: USD 367 million OPEX projected investments : to be defined Contract term: 25 years Auction criterion: to be defined IRR: to be defined o Object of concession: public passenger transportation Lease / concession / consideration value/ etc: to be defined services Public Guarantees: to be defined o Model: Concession Capacity: 50,000 pax / day o Structurer: BNDES Winning Bidder: to be defined o Grantor: State of Minas Gerais Concession / Lease /Consideration: to be defined o Sector Ministry: Ministry of Regional Development Status: under assessment o Regulator: State of Minas Gerais Q3/19 Q4/20 Q4/20 Q2/20 Q2/21 Q3/21 Q3/21 Qualification in PPI Auction Contract signature
Subnational level partnerships – States prison systems o Greenfield and brownfield projects: Santa Catarina: new detention center comprising a prison with capacity for up to 600 prisoners and medium security prison(s) with capacity between 1,800 and 3,300 prisoners, considering in this total 806 vacancies in the Blumenau Industrial Penitentiary Rio Grande do Sul: new detention center comprising medium o Policy objectives: alternative solutions that enable the security prison(s) with a total capacity for up to 1,125 prisoners, in provision of public services with greater efficiency, quality the city of Erechim and effective re-socialization of prisoners through work and o Contract term: up to 35 years study. o Main modeling assumptions: under assessment o Object of concession: construction, maintenance and o Consultancy in charge of assessments: consortium led by PWC (under operation of prisons. approval) o Model: administrative concession o Status: contracting between BNDES and states o Structurer: BNDES and BID o Grantor: states of Rio Grande do Sul and Santa Catarina o Sector Ministry: Ministry of Justice o Regulator: states’ secretariats Q4/19 Q4/20 Q2/20 Q4/21 Q2/21 Q3/21 Q4/21 Qualification in PPI Selection of pilot projects
Supporting Subnational Level Partnerships Daycares • PPI, the Ministry of Education and BNDES are prospecting for Pilot Projects with states and municipalities • 1st pilot project for PPP in daycare singled out in Teresina (PI) (40 unities). • Private partner is responsible for accomplishing the civil works, equipping, maintaining and operating for up to 35 years, with standards to meet in quality of service. • Public partner is responsible for pedagogical planning, selection of children to be served, monitoring and inspection of contracts and goals.
Supporting Subnational Level Partnerships Primary health care – Health Basic Units (UBS) • Assessments of alternative partnerships for concession aimed at constructing, modernizing, operating, maintaining, managing and improving the network of UBSs of municipal competence. Basic Features: • Primary Health Care is present in all states of the Brazilian Federation. All over the country there are 42,893 family Health Teams deployed in 5,475 municipalities, with a goal to expand to 50,000 teams by 2023. The current network of UBS has 33,006 unities, of which 3,987 are constructions in progress or to be executed, and 3,157 are construction at a standstill or with signs of being so (February/2020). Object: • Provision of primary health care services in which the private partner is responsible for completing the works / construction, equipment, maintenance and operation, for up to 35 years, with service levels as well as performance and quality indicators. The Public Partner is responsible for planning, monitoring and enforcing contracts and performance targets. Currently under prospection of pilot projects. Assessments: Under analysis with BNDES Model: Municipal Public-Private Partnership (or through a consortium of municipalities) Grantor: Municipality or Public Consortium Body: Ministry of Health Public Guarantees: Infrastructure Guarantee Fund - FGIE Stage: Assessments / Requirements definition
Children's Hospital in Guarulhos, state of São Paulo • Description: Assessments of alternative partnerships for concession aimed at the construction, equipping, operation, maintenance and provision of clinical and non-clinical services of a Specialized Health Care unit under municipal competence. • Object: The new hospital will be structured through a public-private partnership, in the form of an administrative concession, which should replace the current service at the existing Municipal Hospital for Children and Adolescents (HMCA). Guarulhos Children's Hospital will be built in an area provided by the City Hall, allowing not only an increase in the capacity of beds offered, but also the implementation of an architectural proposal suitable to the highest quality and efficiency in the provision of hospital services. Among the new services designed, we highlight hospitalization, hospital care, 24-hour urgent and emergency care, outpatient care, diagnostic and therapeutic support service (internal), diagnostic and therapeutic support service and medical specialties (external), elective surgeries and other services not identified above and which may prove to be necessary to meet the demand of the City Hall. Assessments: Structurer - BNDES Model: administrative concession PPP Grantor: the Municipality Agency: Guarulhos City Hall Public Guarantees: under assessment Contract period: to be defined Status: definition of requirements Completion of Assessments: 1o half 2022 Tender: 2o half 2022
Next steps July, 2020
Next PPI auctions in 2020 2nd Half/2020 (41 assets) Highways (2) Port Terminals (11) Sunational Levels: states and municipalities (14) • BR-153/080/414 (GO/TO) • 4 in Itaqui/MA • 9 Public Lightening PPPs: • BR-163/230 (MT/PA) • 1 in Paranaguá/PR • Aracaju/SE • 2 in Aratu/BA • Feira de Santana/BA • 2 in Santos/SP • Belém/PA • 1 in Maceió/AL • Franco da Rocha/SP • 1 in Santana/AP • Nova Lima/MG • Sapucaia do Sul/RS • Campinas/SP Railways(3) Mining Rights (3) • Camaçari/BA • FIOL (BA) • Phosphate - Miriri (PB) • Cachoeiro do Itapemirim/ES • Renewal EFVM • Copper - Bom Jardim de Goiás (GO) • Renewal EFC • 1st round - ANM available areas • 3 Concessions of water distribution and sewage treatment • State of Alagoas Energy (1) Fishery Terminal (1) • State of Rio de Janeiro • Transmission Lines 01/2020 • Cabedelo (PB) • City of Cariacica/State of Espírito Santo (sewage PPP) Oil and Gas (1) National Parks and Forests (3) •2 Urban Solid Waste PPPs: • 2nd cycle of Open Acreage • Aparados da Serra (RS) and Serra Geral (SC) • Teresina/PI • Humaitá Forest (AM) • Convale consortia/MG Privatizations (2) • Obs. There is also the prospect of delivering Environmental • Eletrobras Licensing: The Preliminary Licensing (LP) of the Pedral do Lourenço • Ceitec / PA waterway
PPI Auctions - 2021 2021 (88 assets) Port Terminals (9) Airports – Round 6 (24) Privatization (10) Subnationals (16) • 3 Terminals in the Port of Maceió/AL 22 airports in 3 blocks • ABGF • 2 Concessions of Urban Solid Waste • 1 in the Port of Fotaleza/CE • Block North • EMGEA • Bauru (SP) • 2 in the Port of Santos/SP • Block South • CEASAMINAS • Consortia Comares (CE) • 1 in the Port of Paranaguá/PR • Block Central • CEAGESP • 1 Concession of Urban Solid Waste, • 1 in the Port of Vila do Conde/PA • NUCLEP Water and Sewage services • 1 in the Port of Areia Branca/RN 2 airports • CODESA • São Simão (GO) • Viracopos – Campinas (SP) • TRENSURB • São Gonçalo do Amarante – Natal (RN) • CBTU • 3 Concessions of water and Sewage • SERPRO services Highways (5): Fishery Terminals (7) • DATAPREV •State of Acre • BR-116/465/101 (SP/RJ) - Dutra •State of Amapa • Belém (PA) Oil and Gas (3): • BR-470/282/153 (SC) •Porto Alegre • Manaus (AM) Aracajú (SE) • BR-381/262 (MG/ES) • 2 blocks – Transfer of Rights (Sépia and • Natal (RN) • 4 Concessions of Sewage services • BR-116/493 (RJ/MG) - CRT Atapu) • Vitória (ES) • Crato (CE) • Integrated Highways of Paraná state • Round 17 • Santos e Cananéia (SP) •Volta Redonda (RJ) Regional Development (1) •State of Rio Grande do Sul Parks (5) Railways (2) • Irrigation Perimeter in Irecê (BA) •State of Ceara • Lençóis Maranhenses (MA) • Ferrogrão Obs. There is a prospect of decision- • 6 Public Lighting PPPs: • Jericoacoara (CE) • Renewal MRS making on environmental licenses: (7): • Corumbá (MS) • Iguaçu (PR) • Patos de Minas (MG) • Canela (RS) • Construction licensing of BR-080/MT Defense and Security (2) • Toledo (PR) • São Francisco de Paula (RS) • Comaer PPP • Construction licenseing of BR-158/MT •Barreiras (BA) • Security Forces Communication PPP Mining rights (2) • Crato (CE) • Preliminary Licensing of BR-319/AM/RO • Valparaízo de Goiás (GO) • Coal in Candiota (RS) Telecommunications (1) • Preliminary Licensings of HPPs of • Kaolin in Rio Capim Castanheira/MT, Formoso/MG, • 5G Tabajara/RO and Telêmaco Borba/PR
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