BRASILIA Jan 9 Brazil and China expect a joint
fund of $20 billion to begin financing infrastructure projects
in the South American country by around March, including bidding
for auctions of government-sponsored road, port, airport and
logistics operating licenses.
Planning Ministry's foreign affairs secretary, Jorge
Arbache, said the countries want the fund, agreed last year, to
finance the construction of railroads linking Brazilian soy- and
corn-producing belts to ports. China is a large buyer of
"Railways will be one of the focuses as both countries are
eyeing that sector with much interest," said Arbache, adding
that, unlike other Chinese funds, financing decisions will be
made depending on both governments' strategic priorities.
The fund could help Brazilian President Michel Temer bolster
infrastructure investment to pull Brazil out of its worst
recession on record that threatens to stretch into a third year.
In September, Temer launched an investment program to sell
the concession of roads, airports, ports and railways, but
reduced the participation of the state-run development firm
BNDES, which is the main provider of long-term corporate loans.
Facing a massive budget deficit, the joint fund could help
the government diversify financing options for companies
struggling to find fresh capital amid the crippling recession
and ongoing corruption investigation that has targeted Brazil's
largest construction companies.
Temer plans to launch a new concession program in March to
bid on other roads, infrastructure, and oil and gas fields.
Arbache said he expects the fund to be fully operational by
March. Once it begins operations, it will be able to analyze
financing requests that could also encompass mining, oil and
The total amount of the fund could increase in coming years
if the business model proves a success. China provides three
quarters of fund, or $15 billion, while Brazilian state-run
banks BNDES and Caixa Economical Federal the rest.
Authorities in both countries are also considering creating
a guarantee fund to help companies interested in biding for
projects. Talks remain in the early stages and there were no
immediate details available about possible amounts, Arbache
(Reporting by Alonso Soto; Editing by Guillermo Parra-Bernal
and Bernadette Baum)