The incoming Brazilian administration is embarking on a program to sell equity interests and grant concessions in over 100 state-owned entities, as part of its effort to pay Brazil’s public debt and reduce the role of government in the economy.  The privatization program is administered by the Special Secretariat of Privatizations and Divestments (Secretaria Especial de Desestatização e Desinvestimento), a newly-created government agency within Brazil’s Ministry of Economy.

The federal government is planning to grant concessions or sell its holdings in companies with activities in the following industry sectors:

  • Airports – Concessions will be granted to manage and operate a total of 12 airports, divided into 3 geographic blocks (Northeast, Mid-West and Southeast Brazil); additionally, the federal government intends to sell its minority equity interest in the entities that are the concessionaires in Brazil’s 4 largest airports – Brasilia, Sao Paulo, Rio de Jeneiro and Belo Horizonte.
  • Energy – Sale of the government’s equity interest in Eletrobras, which is responsible for 31% of Brazil’s energy generation capacity and 49% of Brazil’s transmission capacity.
  • Oil and Gas – Grant of concessions for the exploration of off-shore petroleum basins.
  • Ports – Concessions for the operation of certain terminals in several ports throughout Brazil.

In addition, the Brazilian government also intends to grant concessions or sell equity stakes in other sectors, including transportation (roads and railroads), mining, Casa da Moeda (equivalent to the US Mint and the Bureau of Engraving and Printing), water and sewage, financial institutions, and lottery, among other industry sectors.

Some RFPs (Editais) have already been published by the different agencies in charge of each concession or public auction.  Each agency is in charge of formulating the mechanism through which it will select the winning bidder.

 

Bryan Cave Leighton Paisner's corporate team, based in Miami, has extensive experience representing bidders and state-owned companies in privatizations in Brazil and in other countries in Latin America. 

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