Brazilian states seek Chinese investors for infra projects

Wednesday, January 13, 2016

In the midst of an economic crisis, the Brazilian states of Bahia, Ceará, Maranhão, Pernambuco and Paraná are seeking Chinese investors for at least nine infrastructure projects.

Although recent turbulence in Chinese stock markets has raised some concern, the overall consensus is that China has long-term interest in Brazil, especially for investments in the industrial and infrastructure segments, local daily Valor Econômico reported.

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Among the projects in which the Chinese could be interested is a deep water port, a premium oil refinery, a light rail transit (LRT) system, a bridge, steel plant, passenger train and renewable energy projects.

By March, Bahia governor Rui Costa should be traveling to Beijing primarily to discuss the state's 5.3bn-real Porto Sul project in the city of Ilhéus and its 20km LRT project in state capital Salvador, which is budgeted at 1.5bn reais, according to the report.

Discussions on a 13km bridge between Salvador and the island of Itaparica are also planned. It is priced at approximately 7bn reais.

Design plan of Salvador-Itaparica bridge (CREDIT: Bahia state)

In 4Q15, Ceará state governor Camilo Santana closed a deal with the Chinese to build a 54mn-real solar power equipment factory in the area of Pecém Port to manufacture smart meters and converters.

The state is also working on a deal to build the premium 1 refinery for state oil company Petrobras designed to refine 300,000 barrels of crude a day. It was initially budgeted at 11bn reais, but should cost much less if built by the Chinese, according to the report, which did not disclose the names of possible Asian counterparts involved.

Other plans include the construction of a 10Mt/y capacity steel plant in the state of Maranhão to be supported by financing from the New Development Bank (NDB), renewable energy projects such as the installation of wind farms and manufacture of solar panels in Pernambuco state, and a 150km passenger train between the cities of Maringá and Londrina in the state of Paraná.