Brazil project finance expected to remain vibrant next year

Project finance in Brazil will be driven by electric power, sanitation, highways and airports next year.

“Just in the sanitation area in 2023, there is a need for refinancing operations of at least 15bn reais [US$2.87bn]. This amount refers to financing operations sanitation companies used for the payment of fees to local governments during concession auctions and now this financing needs to be renewed," Andréia Bentim (pictured), project finance director at Bradesco BBI, Banco Bradesco's investment banking arm, told BNamericas.

According to Bentim, the concessions agenda will continue and the sanitation sector remain vibrant for financing operations as states such as São Paulo, Rio Grande do Sul and Minas Gerais plan to privatize their water firms. 

"The privatization movement tends to strengthen these companies to invest in their operations," Bentim said.

The electric power sector, specifically generation and transmission, will also remain attractive. 

"Brazil must add 5GW/y to the system. In addition, for 2023, an energy transmission auction is expected, which often results in investments of 50bn reais. These points make the electricity sector very robust in terms of financing needs," Bentim said.

More concession auctions are planned in the highway and airport sectors. 

"The expectation is that the auctions in these sectors continue, even with the change of government, since the projects were well-structured and because the results of past concessions were generally positive, generating infrastructure investments," according to Bentim.