Foreign Investors Still Buying Brazil

Still in the midst of the country’s longest recession, the Brazilian government recently announced a new package under the Investment Partnership Program (PPI) aimed at raising R$45 billion (est. $14.5 billion) in private investment for infrastructure projects.

On Thursday, March 16, the government launched its infrastructure concession and privatization program with the auction of four airports: Salvador, Fortaleza, Florianopolis, and Porto Alegre. The government raised a total of R$3.7 billion ($1.187 billion) from the auction, 23 percent above the expected value. European companies won the bids for all four terminals. German group Fraport AG will operate the airports of Fortaleza and Porto Alegre, bidding R$425 million (est. $136 million) and R$290.5 million (est. $93 million), respectively. French operator Vinci SA secured a contract to operate Salvador with its R$660.9 million bid (est. $212 million). Finally, Swiss company Flughafen Zuerich AG will take over management of Florianopolis, having bid R$83.3 million (est. 26.7 million).

The positive result of the auction suggests the government has made progress in improving investor confidence in Brazil. President Michel Temer tweeted about the success of the auction, claiming to have reconquered credibility in the international arena. Besides optics, the airports are expected to receive R$6.613 billion (est. $2 billion) in concessions investment, improving of airport services for Brazilians travelers. The auctioning of concessions and projects in the energy, transportation and sanitation sectors is expected to continue through the first semester of 2018. 

Image by Agencia Brasil Fotografias