With the conclusion of former President Dilma Roussef’s impeachment procedure, the government of President Michel Temer announced, on September 13, its first set of infrastructure projects to be privatized, whether by concession or by assignment. The announcement was followed by the publication of Resolution nº 1 of the Council for the Investment Partnerships Program, regulating the general standards and procedures for the assignment of the projects which compose the Program.

Whether by means of the Investment Partnership Program (“PPI”) or not, the list of projects which are to be assigned to private entities in the years of 2017 and 2018 includes: (i) 4 airports, (ii) 3 railroads, (iii) 3 Oil and Gas Bidding Rounds, (iv) 3 waters and sewers companies, (v) 2 ports, (vi) 2 highways, (vii) 7 energy distribution companies and generation assets, and (viii) assets held by the Company of Research and Mineral Resources.

In a nutshell, the primary goal is to make the country once again attractive for domestic and foreign private investment by allowing the offer of very key and profitable projects. In terms of numbers, the government estimates to collect over R$ 24,000,000,000.00 in concessions. Aside, the assignment of such projects is also part of Temer’s policy to cut back public costs.

To increase the power of attraction of the concessions, further measures are being taken in the sense of mitigating risks, costs and increasing the project’s strategic advantages.

As an example, in the railroads sector, the government intends to revoke current regulation in order to grant concessionaires, not only the operation of the railroad, but also to allow them to offer transportation services as well, under supervision of the National Transports Agency.

From a regulatory perspective, there are also bold on-going initiatives, aiming to alter the current competences of regulatory agencies, which are nowadays responsible for drafting, bidding and executing concession agreements. In a near future, the government plans to handle such prerogatives back to its Ministries, meanwhile increasing the regulatory agencies’ normative and supervision capacities in order to manage and supervise the performance of the contracts once they are executed.

For foreigner investor specially, another regulatory barrier is likely to come down in the bids to come: the need to constitute joint ventures or any kind of association with Brazilian companies. According to the executive-secretary of the PPI, the intention is not to make any special restrictions to foreign bidders, as the national partner requirement, which had become a common standard in the auctions of key infrastructure sectors in the country.

Overall, the market has been showing a good response to the announcements and measures taken so far, with investors and specialists providing good reviews and expectations towards the programs. Nonetheless, experts also remind that this attempt to boost economy and draw foreign investment must also be followed by the control of macroeconomic aspects such as interest rates and exchange rates stability.