Brazil's BRK Ambiental eyes tapping capital markets

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Friday, August 31, 2018

Brazilian water, wastewater and solid waste management company BRK Ambiental Participações is evaluating options to finance investments as it seeks to expand in the coming years.

The utility is planning to invest 7bn reais (US$1.7bn) through 2022, with 1bn reais already disbursed, BRK's president Teresa Vernaglia told BNamericas.

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"A major part of our investments are financed via [federal bank] Caixa's special program for sanitation projects called Saneamento Para Todos [sanitation for all]. This is an interesting funding source but we're exploring other options too, such as overseas bonds issues and even debenture issues," said Vernaglia.

"We're interested in participating in more concessions and PPPs here in Brazil," she said, without providing details of the projects under evaluation.

BRK, formerly known as Odebrecht Ambiental, was founded in 2008 as Foz do Brasil. Brookfield Business Partners acquired Odebrecht's 70% interest in the company in 2017 after the conglomerate became involved in the Lava Jato corruption scandal and sold a string of assets. The other 30% is held by the FI-FGTS fund.

"Our controlling shareholder [Brookfield] is completely committed to long-term investments in Brazil. So far all profits generated by BRK's operations in Brazil were reinvested in the company," Vernaglia added.

São Paulo-based BRK serves 15mn people.

According to Vernaglia, Brazil's government should change certain aspects of the sanitation sector framework in order to attract more investors, reducing the complexity of regulatory bodies.

"BRK operates in 12 states and responds to 20 different regulatory agencies, each one with different rules on quality and pricing," she said.