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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