February 8, 2017 / 1:03 PM / a year ago

Brazil may offer forex protection in airport auctions -newspaper

SAO PAULO, Feb 8 (Reuters) - Brazil may offer to protect bidders for airports in a March auction from sudden currency moves, local newspaper Valor Econômico said on Wednesday, underscoring efforts to court foreign investment in Brazil’s aging infrastructure.

According to the report, operators would be allowed to deduct the Brazilian currency’s impact on their foreign debt, net of an index tracking inflation, country risk and other measures, from payments made to a government fund.

Current law requires airport operators to transfer 5 percent of gross revenue to the so-called FNAC fund that finances investments in state-run airports.

Under the proposal, that payment could increase to as much as 10 percent of gross revenue if oscillations in the index offset the effect of foreign exchange moves, Valor said, citing Minister Wellington Moreira Franco.

A 10-day public comment period will start by the end of the week, Valor said.

Media representatives for the government were not immediately available to comment on the report.

Investors eyeing long-term infrastructure assets in Brazil have long demanded the government offer some protection from moves in the country’s volatile currency, the real .

Brazil will auction off operating licenses for airports in the cities of Porto Alegre, Salvador, Florianópolis and Fortaleza on March 16 as part of a wave of privatizations meant to help balance fiscal accounts and tackle transportation bottlenecks. (Writing by Bruno Federowski; Editing by Lisa Von Ahn)

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