Thanks to the Investment Partnerships Programme (PPI), Brazil has redefined itself as a destination for large-scale greenfield projects to follow in the footsteps of the pioneering Xingu Transmission Line. In addressing Brazil’s broad infrastructure needs, Chinese input is invaluable
Brazil and China share a strategic and dynamic vision for their futures that is only beginning to be realised. When it comes to infrastructure, China’s State Grid has led the way, investing over $15bn in Brazil between 2010-2017, with over 80% of business in the form of acquisitions and mergers.
At 2,500km long, the Xingu Transmission Line from Pará to Rio de Janeiro saw Siemens Brazil tackle the huge greenfield project’s engineering, procurement and construction. Now, they have lent support to China’s Belt and Road Initiative (BRI) that, with its plans to link its Atlantic and Pacific coasts among Brazil’s major infrastructure goals, could see the South American powerhouse have a huge impact on the future global trade landscape.
Bucking the country’s historic trend of favouring highway infrastructure over rail, the Bi-Oceanic Corridor is one such project that has returned to the forefront of Brazil’s logistical plans. On one side, Brazil has the largest soy crop in the world but difficulty reaching foreign markets. On the other side is China, the world’s largest consumer market. Helping such projects come to light requires a systematic approach that has made such projects more attractive to international companies, from legal security to environmental licensing and off-setting currency volatility.
“In the past, not doing greenfield wasn’t by choice, it was simply because they were too hard to do in Brazil,” says Siemens Brazil CEO André Clark. “The environment was not right and, after the single biggest economic crisis in the history of Brazil, the assets were all up for grabs.”
By bringing greater security to these vast projects, the Investment Partnerships Program (PPI) has accelerated partnerships between the Brazilian government and private enterprises. Charged with evaluating key FDI, PPI approval elevates projects to government-level priority, offering significant guarantees to international investors.
In other words, both Brazil and China have both been through their own regulatory changes designed to make diversified trade more straightforward.
“We are paying special attention to China because we know it is a great investor and our assets, notably in infrastructure, are very highly prized,” said PPI’s Wesley Callegari Cardia. “Railways, ports, energy, oil and gas, mining and highways are all sectors that they are interested in.