Brazil PPPs on the rise

Tuesday, September 11, 2018

The number of public-private partnerships in Brazil expanded through August, thanks to an increase in contracts with municipal governments for public lighting.

A total of 203 PPPs were launched in January-August, up 8% compared with the year-ago period, according to local consultancy firm Radar PPP.

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"The expansion highlighted that PPPs have been a tool for financing infrastructure in a time of fiscal restraint," said Guilherme Naves, a partner of Radar PPP, according to Folha de S. Paulo newspaper.

Brazil's federal, state and local governments have been cutting spending in recent years due to the poor economy.

After contracting 3.5% in 2015 and also in 2016, Brazil's economy expanded just 1% last year and is expected to grow at a similar pace this year, according to economists.

More private sector investment is projected for the coming years.

"Brazil has a huge need for investment in the area of sanitation. To reach the universalization of services, we need 300bn reais [US$72.5bn] in investments," Teresa Vernaglia, president of Brazilian water, wastewater and solid waste management company BRK Ambiental Participações told BNamericas. "State and municipal [water utility] companies will not have the cash to make these investments. It will be the private sector that makes these investments."