Brasília – Notwithstanding challenges, Brazil has one of the best environments for developing public-private partnerships (PPPs) in Latin America. The conclusion is from a report released this Wednesday (13) by the Inter-American Development Bank (IDB) and The Economist newspaper.
The survey’s authors did not establish a ranking but divided the 26 assessed countries into groups. Brazil was placed in the “developed” category, with scores between 60 and 79.9. Chile, Uruguay, Peru, Colombia, Panama, and Costa Rica were in the same category. No country in the region was included in the “mature” category, with scores between 80 and 100.
Provided for in Law 11.079/2004, the PPP represents a way for the public government to attribute service to the private sector. The private company makes investments and performs a service for the government that can be paid in two ways: Entirely by the State or partially by the State and partly by the service user, through a fee. This last model is indicated in cases where the traditional concession would result in tariffs that could be too expensive for the users.
The report highlighted Brazil has “one of the most active PPP markets in Latin America,” concentrating over 40% of the region’s investments in PPPs from 2011 to 2020. From 2010 to 2019, the report emphasized PPPs represented 25% of total infrastructure spending in the country. The highlight went to the energy sector, which concentrated 77% of the amount invested in PPPs from 2018 to 2020.
Framework
According to the report, the business environment for PPPs in Brazil has four strengths. The first is the establishment of the Investment Partnership Program Secretariat (SPPI) in 2016, classified by the report as a “well-equipped and well-funded agency.” Linked to the Brazilian Ministry of the Civil House until 2019, the entity was transferred to the Ministry of Economy in 2020, with the status of Special Secretariat.
The other three strengths highlighted by the report were the efficient selection and preparation of projects to be included in PPPs, attention to environmental and social sustainability in the project preparation phase, and frequent evaluation of performance and impact during project design.
Translated by Elúsio Brasileiro
