Brazil public parks concessions seen to offer great potential

As parks concessions in Brazil are becoming more widespread, investors need to balance risk and reward.

“There is a risk zone that is still not very well-defined in relation to national parks, because the companies that take over these parks cannot only be concerned with increasing revenues, they also have to commit to environmental preservation, and if the number of visitors to these parks increases too much, at some point the conservation issue may fail,” Paulo Dantas, an infrastructure and project finance specialist at law firm Castro Barros Advogados, told BNamericas.

"Ecotourism in Brazil is still a fraction of what exists in the US, for example, which has dimensions and attractions similar to Brazil. However, there is another great potential of these concessions that is not yet clearly captured, which are the revenues that could be generated through carbon credits and forest management operations," João Cortez, a partner at infrastructure advisory Vallya, told BNamericas.

Development bank BNDES has structured more parks concessions as authorities seek to lower costs while promoting ecotourism and conservation. The full list of BNDES’s 192 park projects is available here.

In January, Rio de Janeiro city asked BNDES to structure the concession for seven parks. In March 2022, BNDES awarded a 30-year concession for Iguaçu national park (pictured) to Novo PNI consortium, which paid 375mn reais (US$75mn) and comprises construction firms Construcap and Grupo Cataratas, of which private equity firm Advent is a shareholder.

Awarding may slow down, though, as the environmental ministry will analyze the structured projects before advancing any auctions.