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Reforms Drive Global Investment in Brazil’s Roads



The State of Sao Paulo is often called “the locomotive of Brazil” because it’s responsible for almost one-third of the nation’s GDP. But the symbol of economic progress might be about to change: These days, it’s not a train but Sao Paulo’s road networks that are driving the next phase of infrastructure investment in Brazil.

IFC-led public-private partnerships (PPPs) are helping the government of the state steer this path forward. In a country whose recent economic downturn prompted officials to search for original ideas that would attract a wider range of investors, IFC is helping design a new model for road concessions—bringing in massive private investment and expertise from international investors.

IFC was mandated by the State of Sao Paulo government to structure and tender four brownfield road PPPs totaling 1,500 kilometers. Meeting this goal required IFC to incorporate international benchmarks, and help the state government overcome barriers that historically have closed this sector to international private investors.

IFC’s model increased transparency, enhanced bankability, and protected the concessions against currency fluctuations and changes in technology. As obstacles fell, Brazil attracted high-quality international investors to its road market despite the nation’s political and economic situation.

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