Brazil Infrastructure Investments Opportunities 2011

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Top Infrastructure Projects & Investment Opportunities in the biggest and more dynamic country in Latin America. A presentation prepared by Executive Office of the President (March 1st, 2011).

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Brazil Infrastructure Investments Opportunities 2011

  1. 1. BrazilInfrastructure Investment OpportunitiesTokyo, 1.3.2011Guilherme Walder Mora RamalhoInfrastructure AdvisorExecutive Office of the President of Brazil
  2. 2. PAC – Growth Acceleration Program In 2007 – PAC 1 ! To accelerate the pace of economic growth ! To increase employment and income rates ! To decrease social and regional inequalities ! To overcome infrastructure bottlenecks In 2009, a new goal ! To reduce the impact of the international economic crisis – countercyclical policy In 2011, a new stage: PAC 2 – 2011-2014
  3. 3. GROWTH ACCELERATIONPROGRAM – PAC 1, 2007-2010 Infrastructure projects in three areas US$ billion Area 2007-2010 After 2010 TOTAL LOGISTICS 54.5 28.9 83.3 POWER G&T 171.7 429.4 601.1 SOCIAL AND URBAN 146.8 18.0 164.9 TOTAL 373.0 476.3 849.3
  4. 4. GROWTH ACCELERATIONPROGRAM – PAC 2, 2011-2014 Preliminary investment forecast US$ billion Area 2011-2014 After 2014 TOTAL LOGISTICS 59.4 2.6 61.9 POWER G&T 262.3 356.2 618.5 SOCIAL AND URBAN 221.0 - 221.0 TOTAL 542.6 358.8 901.4
  5. 5. INVESTMENT OPPORTUNITIES:POWER GENERATION AND TRANSMISSIONHIGHWAYSRAILROADSAIRPORTSPORTSURBAN MOBILITYHOUSING AND SANITATION
  6. 6. ELECTRIC POWERGENERATION AND TRANSMISSION
  7. 7. ELECTRIC POWER SYSTEM – GENERAL FEATURESInstalled Capacity – 105,066 MW• Number of Customers – 64.6 million• Energy Production – 463.2 TWh / year – 60% of South America• Peak – 67,632 MW• Transmission Lines – 96,207 km ! 230kV Source: Ministry of Mines and Energy
  8. 8. ELECTRIC POWER GENERATIONPriority to competitive, renewable sources with low carbon emission• Annual tenders to contract energy in the regulated contracts environment • Hydroelectric power plants – energy to be delivered at the fifth year after the tender • Thermal power plants and others – energy to be delivered at the third year after the tender• Tenders planned2011-14 54 HPP – 47,870 MW – US$ 57.9 billion
  9. 9. ALTERNATIVE ENERGY SOURCES! From 2011 to 2014 !71 Wind Power Plants – 1.803 MW !3 Biomass TPP – 224 MW TOTAL PROJECTED INVESTMENT- US$ 5.5 billion
  10. 10. TRANSMISSION LINES! Large Interconnections – 22.765 km! Regional Lines – 13.921 km TOTAL PROJECTED INVESTMENT- US$ 14 billion
  11. 11. Alternative Energy Sources Wind Power Aratua 1 Araras Coqueiros Areia Branca Buriti Quixaba Miassaba 3 Cajucoco Garças Lagoa Seca Vento do Oeste Morro dos ventos I, III, IV, VI, IX Dunas do Paracuru Taíba Águia Rei dos Ventos 1, 3 Taíba Andorinha Icarai I e II Eurus VI Colonia Cabeco Preto Embuaca Mangue Seco 1, 2 , 3 e 5 Barra dos Coqueiros Planaltina Faisa I, II, III, IV e V Mar e Terra Porto Seguro Santa Clara I Rio Verde Guirapa Icarai Guanambi Igapora Sangradouro 3 Candiba Serra do salto Alvorada Ilheus Sangradouro 2 Pedra do Reino Pindai Santa Clara II, III, IV, V e VI Osório 2 Seabra Macaubas Nossa Senhora da Conceição Fazenda Rosário 3 Pajeu do vento Licinio de Almeida Coxilha Negra V Novo Horizonte Coxilha Negra VIPAC 2 Coxilha Negra VII Fazenda Rosário
  12. 12. Alternative Energy Sources Biomass UTE Unid. Bio. Morro Vermelho UTE São João da Boa Vista UTE Boa Vista UTE Ben Bioenergia UTE Unid. Bio. Água Emendada UTE Quirinópolis (1ª etapa) UTE Baia Formosa UTE Quirinópolis (BC) UTE Porto das Águas UTE Angélica UTE Jataí UTE Rio Brilhante F. I e II UTE Cachoeira Dourada UTE Unid. Bio. Alto Taquari UTE Codora UTE Chapadão Agroenergia UTE Paraúna UTE Ferrari UTE Caçu I UTE Santa Isabel BC UTE Santa Luzia I UTE Lagoa da Prata F. I e II ‘ UTE CBB UTE Costa Pinto BCUTE Unid. Bio. Costa Rica UTE Vale do Tijuco UTE São Fernando UTE Vale do São Simão UTE Bonfim UTE São José BC UTE Iacanga UTE Bevap UTE NobleUTE Ipaussu Bioenergia ‘ UTE Decasa UTE São João Biogás UTE Pioneiros II BC UTE Interlagos UTE Cocal II UTE São Luiz UTE Santa Cruz AB F.I e II UTE Biopav II UTE Flórida Paulista BC UTE Clealco- Queiroz UTE Colorado BC UTE Barra Bioenergia UTE Noroeste Paulista PAC 2 UTE Rafard BC PAC 1 UTE Destilaria Andrade UTE Quatá BC PAC 1 com conclusão UTE Ester UTE Conquista do Pontal original após 2010
  13. 13. OIL AND GASExploration, Production and Natural Gas Transport Infrastructure
  14. 14. PRODUCTION AND EXPLORATIONIncrease oil and gas productionSeismic assessment, drilling, plataform production! To explore the reserves and enlarge national production, including the new Pre-Salt discoveries! Value chain: naval industry, mecanic engineering, steel, chemical, precision engineering among other US$ 418,5 billion 2011-2014 – US$ 110.4 billion after 2014 – US$ 308 billion
  15. 15. PRODUCTION AND EXPLORATION – Pre-Salt Reserves around 10.6 a 16 billion barrels of oil equivalent (boe) Total Pre-salt área: 149 mil km² Jubarte – Parque das Baleias ( ! (( !! ( ! ( ! Sep/2008 – first pre-salt production ( ! ( ! ( ! ( ! ( ! C-M-101 ( ! ( (( ! !! ( ! ! ( ( ! ( ! ( ! ( ! ( ( ! ! ( ( ( ! ! ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! RIO DE JANEIRO Carioca, Iara ( ! ( ! SÃO PAULO Abaré e Iguaçu ( ! Parati ( ! (( !! ( ! ( ! (( !! ( ! ( ! ( ( (( ! ! !! Corcovado ( ! ( ! ( ! ( ! Júpiter ( ! ( ! ( ! ( ! Bem-Te-Vi ( ! ( ! ( (( ! !! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! Tupi, Caramba ( ! ( ! ( ! ( ! ( ! Iracema ((( !!! Azulão Guará
  16. 16. REFINEMENT, PETROCHEMESTRY and FERTILIZER Refinaria Premium I Refinaria Clara Camarão Refinaria Premium II Refinaria Abreu e Lima Petroquímica Suape – PTA FAFEN-SE Petroquímica Suape – PET POY Sulfato de amônio Fabrica de Amônia Complexo Químico UFN-4 Fábrica de Fertilizantes Nitrogenados III Complexo Petroquímico do Rio US$ 76.6 billion PAC 2 2011-2014 – US$ 41,8 billion PAC 1 PAC 1 com conclusão Pós 2014 – US$ 34,71 billion original após 2010
  17. 17. HIGHWAYS
  18. 18. PAC 2 – 2011 – 2014 - HIGHWAYS Preliminary investment forecast Total - US$ 29 billion Type of investment Km Construction 8.000 Maintenance 55.000 Projects 12.600
  19. 19. FEDERAL HIGHWAY CONCESSION PROGRAM Central-South Region – 54% of Brazil’s GDPLength: 2,212.4 km • BR-040/Distrito Federal-Goiás-Minas Gerais – 937 km • BR-116/Minas Gerais – 817 km • BR-101/Espírito Santo – 458.4 km GOTotal Investment: US$5.5 billion DF BR-116 BR-101 BR-040 Governador ES Valadares Concession bidding MG Belo Horizonte Vitória 1nd Half, 2011
  20. 20. CONCESSION MODELInternal Rate of Return: 8.0% per year • Reference value used on the 3rd Phase of the Federal Highway Concession ProgramTerm of Concession: 25 yearsAnnual tariff adjustment according to inflation variationInvestments described in the Highway Usage Program • Constructions required (recovery, duplication, lighting, and others) • Constructions conditioned to the volume of traffic (to expand capacity) • Performance Parameters: paving, safety, signage, lighting, user assistance, and others.Focus on service qualityConcessionaire performs the necessary investments in the most efficient way tomeet the Performance Parameters*Allows the participation of Brazilian or foreign companies, financial institutions,pensions funds and private equity funds, separately or in consortiums
  21. 21. BR-040/DISTRITO FEDERAL-GOIÁS- MINAS GERAIS Connects the federal capital, Brasília, to two important cities: Belo Horizonte and Rio de Janeiro Length: 937 km GO Toll Plazas: 12 DF Basic Tariff BR-040 • US$ per 100 Km: 2.1 MG • Toll*: US$ 1.4 Belo Horizonte Total Investment: US$1.8 billion Concession bidding 1nd Half, 2011*Prices on January, 2007
  22. 22. BR-116/MINAS GERAIS Important South-Southeast connection with the Northeast Length: 817 km Toll Plazas: 8 BR-116 Basic Tariff • US$ per 100 Km: 3.1 Governador • Toll*: US$ 3.5 MG Valadares Total Investment: US$2.3 billion Concession bidding 1nd Half, 2011*Prices on January, 2007
  23. 23. BR-101/ESPÍRITO SANTO Connecting corridor linking RJ, SP and BA states, tourism hubs with high traffic volume. Crucial to cargo transportationLength: 458.4 kmToll Plazas: 7 BR-101Basic Tariff • US$ per 100 Km: 3.7Total Investment: US$1.4 billion ES Vitória Concession bidding 1nd Half, 2011
  24. 24. RAILROADS
  25. 25. PAC 2 – 2011–2014 – RAILROADS Preliminary investment forecast Total - US$ 26 billion Type of investment Km Construction 4.700 Studies 2.985 High Speed Train 1.991
  26. 26. RAILROAD CONCESSION PROGRAM Participation in bidding processes • North-South Railroad • East-West Integration Railroad • High-Speed Rail
  27. 27. NEW CONCESSION AND USAGE MODEL FOR NEWRAILROADS – In study by the GovernmentSeparation of Infrastructure and Operations: • VALEC is a public company which is the concessionaire for the North-South, East-West Integration and Midwest Integration Railroads • Infrastructure management would continue to be under VALEC’s responsibility, and totally separated from the operation • The operation concessionaire (logistics operator) would acquire the right-of-way to use a preset number of tracks • Goal is to optimize the usage of the railroad and reduce costs due to the efficiency gains
  28. 28. Port of Vila do Conde /PA Port of Itaqui/MA São Francisco Waterway Palmas/TO Figueirópolis/TO Anápolis/ GO Ilhéus/BAEstrela D’Oeste/SP Port of Itaguaí/RJ Port of Santos/SP
  29. 29. NORTH-SOUTH RAILROAD – SOUTH SECTION Port of Itaqui / MA Açailândia Aguiarnópolis Araguaína Palmas Alvorad a Uruaç u Anápolis • 33% of Brazilian agricultural production Santa Fé do Sul Açailândia • 72% of agricultural land Aguiarnópolis • Large mineral reserves Araguaína • Outflow of the agro-industrial and Palmas mineral production to four ports Peru North Section South Section Uruaçu Length: 1,525 km Anápolis Bidding for the logistic operator 1st Half, 2011 Estrela D’Oeste (SP) Section to be Concessed Concessed Section
  30. 30. EAST-WEST INTEGRATION RAILROAD• Outflow of the agricultural Port of Vila do Conde / PA and mineral production Port of Itaqui / MA• Waterway integration Figueirópolis (TO)Length: 1,527 km Ilhéus (BA) Bidding for the logistic operator Port of Itaguaí / RJ 1st Half, 2011 Port of Santos / SP
  31. 31. HIGH-SPEED RAILS PLANNED 36 million inhabitants Resende Taubaté São José dos Campos Metropolitan Region of Campinas Volta Redonda Metropolitan Region of São Paulo Metropolitan Region of Rio de Janeiro Campinas - São Paulo - Rio de Janeiro – 511 kmMarket Potential • Metropolitan Region of São Paulo: 19 million inhabitants • Metropolitan Region of Rio de Janeiro: 12 million inhabitants Concession bidding • Metropolitan Region of Campinas: 2.5 million inhabitants 1st Half, 2011Economic Importance • Rio de Janeiro and São Paulo States concentrate 45 % of Brazil’s GDP • São Paulo is Latin Americas biggest financial center, concentrating 70% of the stock market • Rio de Janeiro is the biggest Brazilian tourism hub
  32. 32. HIGH-SPEED RAIL – HSRProject scope • Estimated investment: US$19.7 billion • Deadline for operation start: 2016Concessionaire responsible for the design, construction, operation andmaintenance, complying with technical performance parameters;Auction to be open to all existing technologiesCompulsory technology transferPublic sector participation: own capital and financingDocumentation available at www.tavbrasil.gov.br • Technical studies on demand, alignment, geology, operation and economic-financial modeling completed and available
  33. 33. WORLD CUP 2014 – HOST CITIES Fortaleza Natal Manaus Recife Cuiabá Salvador Brasília Belo Horizonte São Paulo Rio de Janeiro Curitiba Porto Alegre
  34. 34. RESPONSIBILITY ASSIGNMENT MATRIX Issue ResponsiblePortsPassenger Terminals Federal GovernmentAirportsPassenger Terminals and Lanes Federal GovernmentStadiumsConstruction, reform and maintenance States and Municipalities Federal GovernmentUrban Mobility States and Municipalities financingHotels Private sector
  35. 35. AIRPORTS
  36. 36. AIRPORTS Guidelines To provide airports a structure suitable for: • Ensuring quality care and users’ comfort • Meet the projected increased demand Improving the conditions for operational safety: • Lane, yard, control tower • Technological upgrade of the operating systems Total: 25 airports
  37. 37. AIRPORTSHistorical Demand 1997 : 0.3 passengers carried per capita (163.8 million) 2008 : 0.6 passengers carried per capita (189.6 million) 6 milions of new passengers in 2009 After 2003: growth of 10% on passengers carried per capita 10% py 128Number of passengers: Million boardings + landings + connections 111 113 102 13 13 13 96 12 4% py 13 82 80% 59% 74 75 71 11 68 9 63 63 10 9 10 55 10 9 115 11 98 100 83 90 65 66 71 53 54 58 61 44 97 98 99 00 01 02 03 04 05 06 07 08 09 International Domestic Fonte: EMBRATUR
  38. 38. WORLD CUP HOST CITIES AIRPORTSUS$ Million, Preliminary Airport Investment Belo Horizonte 240,4 Brasília 440,2 Cuiabá 51,5 Curitiba 42,8 Fortaleza 164,4 Manaus 192,6 Natal 334,6 Porto Alegre 203,4 Recife 11,6 Rio de Janeiro 404,3 Salvador 26,5 São Paulo 1153,8 Considering Guarulhos Total 3.266,2 (US$720 million) and Viracopos (US$ 410 million)
  39. 39. AIRPORTS
  40. 40. PORTS
  41. 41. PORTS - World Cup • Complementary investments to PAC • Focus on passengers terminals • Host cities with projected deficit in number of beds
  42. 42. PORTS CONSTRUCTION AND MODERNIZATIONUS$ 2.9 billion! Build and modernize docks, piers, terminals, improve aquatic and land access! Debureaucratization of port operations! Passengers Terminals for the World Cup 2014! Reduced logistics costs! Better operational efficiency! Increased competitiveness! Encourage private investments 48 PROJECTS – 21 PORTS - US$ 2.9 billion Ventures Quantity Dredging 12 Port Infrastructure 24 Logistics Intelligence Systems 5 Passengers Terminals – World Cup 2014 7
  43. 43. URBAN MOBILITY
  44. 44. URBAN MOBILITY PAC 2 - Subway, LRT, BRT and bus lanes ! 1st Phase – US$ 6.8 billion – launched Feb 16th !World Cup - projects selected in December 2009 !Federal Government Financing !Execution by state and city governments ! 2nd Phase – US$ 10.2 billion !Public transportation systems in major urban centers US$ billion Investment Union Budget 3.4 Financing 6.8 TOTAL 10.2
  45. 45. URBAN MOBILITY – WORLD CUPSummary per Modal US$ Million Modal Qty Project Value Financing Subway 2 21 20 Bus Terminals 3 38 36 Monitoring 3 66 66 VLT 2 370 312 Bus Corridors 18 1,138 1,067 Monorail 2 2,449 989 BRT 20 2,735 2,098 Total 50 6,817 4,587
  46. 46. URBAN MOBILITY FINANCING – WORLD CUP • Deadline: 4 years of grace period after signing the contract 20 years to repay after the grace period (30 years for public rail transport) • Scope: Light Rail Trains (LRTs), Monorail and Bus Rapid Transit (BRT)
  47. 47. STADIUMS
  48. 48. STADIUM FINANCINGMain financing characteristics:• Amount: Up to 75% of the project value, limited to R$400 million• Term: 3 years of grace period after signing the contract 12 years to repay after the grace period
  49. 49. STADIUMS SITTUATION Investment Capacity Cost per seat Intervention (R$ million) (thousand) (R$ thousand) Curitiba Reform 184.5 41 4.5 Privately- Porto Alegre Reform 130.0 62 2.1 R$ 0.87 billion owned São Paulo Reform 555.0 72 7.7 B. Horizonte Reform 426.1 70 6.1 Brasília Reform 745.3 69 10.8 Manaus Reconstruction 515.0 44 11.7Government- R$ 3.09 billion Owned Cuiabá Reconstruction 454.2 45 10.1 R. Janeiro Reform 600.0 83 7.2 Natal Construction 350.0 45 7.8 Fortaleza Reform 623.0 60 10.4Public-private Salvador Reconstruction 591.7 50 11.8 R$ 1.74 billion partnership Recife Construction 529.5 46 11.5 Total 5,704.3 687 8.3 (*) Considering the basic design values. Including the constructions around the stadiums at São Paulo and Curitiba.
  50. 50. HOUSING AND SANITATION
  51. 51. “MINHA CASA, MINHA VIDA” PROGRAM• 1st phase – 2009-2010 – US$30.7 billion • Production of 1 million homes to families with income up to US$2,784 – equivalent to 14% of the housing deficit • Subsidies for low-income families (up to US$1,670 per month) • Long-term government partnership with private investors • Establishment of a Guarantee Fund to reduce risks and costs• 2nd phase – 2011-2014 – US$40.3 billion • Production of 2 million homes
  52. 52. SANITATION• PAC 2 • Water treatment • Sewage and waste treatment • Projects and studies• To expand sewage collection and treatment system• Improve waste treatment and reduce environmental damage TOTAL PROJECTED INVESTMENT- US$ 12.6 billion
  53. 53. BrazilInfrastructure Investment OpportunitiesTokyo, 1.3.2011Guilherme Walder Mora RamalhoInfrastructure AdvisorExecutive Office of the President of Brazil

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