Brazil
Press Release

Infrastructure investment project for Southeast and DF approved by MCom

Bnamericas Published: Friday, November 11, 2022

This is a machine translation of Brazil's Ministry of Communications' press release

The four states in the Southeast and the Federal District are included in the investment project by Rio de Janeiro company Sumicity Telecomunicações, approved by the Ministry of Communications (MCom) this Friday (11). With validation, the interested party will be able to raise up to R$ 550 million in the financial market for the implementation of a transport network, access network and infrastructure for the telecommunications network. Ordinance 7,427/2022 , published in the Federal Official Gazette (DOU), defines the proposal as a priority for the purpose of issuing incentivized debentures.

This is Sumicity's first investment project approved by MCom. Since 2020, 21 priority projects have already been approved, comprising a portfolio of almost BRL 19 billion. The qualification is valid for a period of five years and aims to stimulate the growth of a private market for financing telecommunications infrastructure.

With the classification of the project as a priority, as regulated by the Federal Executive Branch, there is a reduction in income tax (IR) for investors levied on income from debentures issued to finance projects. In the case of legal entities, the reduction is from 22.5% to 15%. As for individuals, it drops from 22.5% to zero.

LEARN MORE — With the aim of stimulating the construction of the long-term financing market, Law No. 12,431/2011 granted a reduced incidence of IR on financial income earned by individuals and companies. In 2014, the Law was amended and the deadline for issuing incentivized debentures was extended to December 2030.

Ordinance No. 6,197, of July 18, 2022 , of the Ministry of Communications (MCom), conforms to these guidelines and establishes the procedures for approval and monitoring of investment projects considered as a priority in infrastructure in the telecommunications sector.

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