Financing Logistics Infrastructure in Brazil. Edson Dalto Dept. of Transport and Logistics

Transcrição

1 Financing Logistics Infrastructure in Brazil Edson Dalto Dept. of Transport and Logistics

2 Agenda BNDES and infrastructure outlook Logistics sectoral analysis BNDES s support instruments

3 1 BNDES and infrastructure outlook

4 Brazilian Development Bank Disbursements by business sector R$ bi US$ bi Currency 3,80 47,0 51,3 64,9 12,4 13,5 17,1 90,9 23,9 136,4 35,9 168,4 44,3 138,9 156,0 36,6 41,1 190,4 176,9 50,1 46,6 8% 10% 12% 12% 13% 16% 9% 7% 8% 6% 5% 6% 34% 31% 40% 39% 36% 31% 21% 7% 40% 28% 27% 28% 7% 10% 9% 34% 33% 36% 50% 53% 41% 43% 47% 47% 32% 31% 30% 27% Industry Infrastructure Agriculture and Livestock Trade and Services 4

5 Infrastructure Division Understanding BNDES structure BNDES Infrastructure Division comprises only part of the segments usually categorized as Infrastructure Industrial Division Telecommunication Social Infrastructure Division Urban mobility Infrastructure Division Electric Power Industry Oil and Gas Sanitation Renewable Energy Transportation and Logistics 5

6 Infrastructure Division Annual Disbursement Hydropower Thermal Nuclear Renewable Energy Distributors Transmission Railways Highways Ports Navigation Airports Other R$ million // Performed 1 st Semester

7 Disbursements in logistics // 7 Warehouse Airport & Air Transport Pipeline Navigation Port Road Rail R$ Billions CAGR: 34,5% 5,1 7,5 9,4 11,4 5,3 3,6 3,9 1,9 0,4 0,6 0,9 0,9 1, * * Until 1 /15 7

8 Infrastructure Division Portfolio of projects (2003 to ) Sector Capacity # of Projects Financing BNDES (R$ Mil) R$ Thousand Investment (R$ Mil) Toll Roads Km Railways Km, Wagons and 485 Locomotives Ports ton/year Airports and Air Transport Pax/year Navigation 219 Vessels* Pipeline Km Terminals and Warehouses ton/year Other TOTAL Obs: (*) 90 barges 93 tugboats 16 push crafts 12costal vessels e 8 others 8

9 2 Logistics sectoral analysis

10 Transport Matrix Road cargo concentration // 10 Transport Matrix (% of TKU) 3,5% 3,8% 3,5% 3,4% 3,0% 10,5% 11,1% 11,6% 11,4% 11,4% 18,4% 20,3% 19,9% 19,5% 18,2% 67,6% 64,8% 64,9% 65,6% 67,4% Source: Instituto Ilos Roads Rail Water Pipeline Air 10

11 Sector in evolution Institutional and regulatory framework Evolution Broad process of concession Roads, railways and ports (90 s); Roads (2007, ) and airports ( ) Sectoral regulatory agencies Land Transport and Ports (2001) and Civil Aviation (2005) Regulatory framework in evolution Concession Act (1995), Railroads (2011), Ports (1993, 2008 and 2013) Challenges Complex institutional structure Several sectoral ministries and institutions involved (difficulty in understanding the organizational structure) Make clear and efficient the role of government institutions Policy guidelines, studies and modeling, regulation, planning and supervision Promote competition in the bidding process Remove barriers to new entrants (mainly foreigners) and disseminate information about auction (avoid use of RFP) 11

12 Sector in evolution Demand for investment Significant growth in demand over the past decade Roads (10%), Ports (5%), Containers(8%), Railroads (5%), Airports (11%) Integrated view of logistics infrastructure EPL (2011) Evolution Increasing the level of investment (GDP %) PAC, PAC2, PIL, Private Investments Prevalence of road transport (cargo and passengers) Low modal integration Challenges High emission and average age of vehicles High economic costs in transport Infrastructure concessions National consensus, larger scope and PPPs instruments 12

13 Sector in evolution Challenges to Financing Government sources of funding BNDES is the main financing provider for longterm investments Limited resources Fiscal adjustment Evolution Historical high interest rates Savings competes with other fixed income products Challenges Effort to attract capital market and co-financing Infrastructure Debentures (12.431/2011 Act) and conditions for attracting commercial banks Low participation of foreign capital Predominantly in ports and railroads Main investor: the construction industry Many infrastructure concessionaires and few Economic Groups 13

14 Toll roads Existing road concessions # Concessionaires Extension (thousand Km) Extension Traffic Traffic (milllion of vehicles) ,463 Km Concessions Km 18 Concessions Km 5,92 6,76 8,23 10,81 12,94 14,33 15,37 15, ,41 2,45 3,07 3,51 3,80 4,64 6,91 6, Revenues (R$ billion) Revenue (R$ bilhões) Investments (R$ bilhões) Union Federations Investments (R$ billion) Source: ABCR 14

15 Toll roads Recent road concessions and new projects // 15 PIL R$ 66,1 bi Legend: Existing concessions Bid 2015 PMI

16 Railways BOA VISTA Current network MACAPÁ PORTO VELHO MANAUS Vilhena Oriximiná Juruti CUIABÁ Miritituba Sinop Sorriso Santarém Altamira Lucas do Rio Verde ALL Malha Norte Corumbá ALL Malha Oeste Maracaju FNS (Tramo Norte) Ferroeste Rondonópolis Itiquira GOIÂNIA Alto Araguaia CAMPO GRANDE Ribeirão Cascalheira Pres. Epitácio Cianorte Eclusa de Tucuruí Marabá Carajás Alto Boa Vista Figueirópolis Barreiras Luís Eduardo DF PALMAS Uruaçu Rio Paranaíba Estrela d Oeste Panorama Limeira CURITIBA Barcarena EFC Araquari FLORIANÓPOLIS Imbituba Tubarão BELÉM Açailândia TERESINA Estreito Balsas Eliseu Martins Rio Balsas SÃO PAULO SÃO LUÍS FNT Ibotirama Sobral Piquet Carneiro Juazeiro Caetité Brumado da Bahia Ilhéus Montes Claros BELO HORIZONTE FCA Gov. Valadares RIO DE JANEIRO Salgueiro VITÓRIA ALL Malha Sul FORTALEZA Macau Porto Real do Colégio SALVADOR EFVM MRS NATAL MACEIÓ ALL Malha Paulista TLSA JOÃO PESSOA RECIFE 12 Concessionaires (28,314 km) ALL (4 stretches) 12,000 Km VLI (2 stretches) 7,940 Km Cargo Volumes Transnordestina 4,207 Km Vale (2 stretches) 1,797 Km MRS 1,674 Km Other (2 stretches) 0,412 Km billion TKU % iron ore PORTO ALEGRE FTC Santana do Livramento Pelotas Aceguá Rio Grande 16

17 Railways New projects PIL R$ 86,4 bi // 17 New concessions: R$ 70,4 bi Investments in existing concessions: R$ 16,1 bi 7,535 kilometers of new concessions 8 stretches Concession for 35 years Legend: Preview PMI 17

18 Railways Brazilian industry Significant production and high potential Source: Abifer Wagons Locomotives Average production over the last 10 years: 3,751 wagons and 52 locomotives Forecast for the next years: 4,000 wagons and 200 locomotives (small and large) Fleet Evolution CAGR Locomotives ,0% Wagons ,1% Average age of fleet of wagons Source: ANTF 18

19 Airports Conceded airports represents 46% of total pax PIL R$ 8,5 bi Legend: Existing Concessions 4 Major Airports: R$ 8,4 bi (2016) Regional Airports: R$ 78 mi 19

20 Million t Ports Demand growth TOTAL Short Sea Interocean Inland Navigation Mllion TEU ,2 5,0 5,7 6,2 6,5 7,0 6,1 6,8 7,9 8,2 8,9 9, Million t CAGR (%) SOLID BULK 5,2 LIQUID BULK 3,3 BREAK BULK 3,7 CONTAINER 8,4 TOTAL 5,0 CONTAINER BREAK BULK LIQUID BULK SOLID BULK

21 Ports Investments in new concessions, renewal and private terminals PIL R$ 37,4 bi 50 New concessions: R$ 11,9 bi 63 New Private Terminals: R$ 14,7 bi 24 Renewal of existing concessions: R$ 10,8 bi Legend: Block 1 Block 2 21

22 Main export corridors Soybean, soy meal and corn (2014/15 harvest) Total production: 178 million ton Exportation: 84 million ton Rodrigues Alves Cruzeiro do Sul Ports SE and S: 65,5 mi t 78% Ports NE: 6 mi t 7% Ports N 12,5 mi t 15% RIO BRANCO BOA VISTA Porto de Itacoatiara Porto de Porto Velho 3,1 3 PORTO VELHO MANAUS Porto de Indaiatuba 0,3 Vilhena Porto de Barcarena MACAPÁ Porto de Santarém Oriximiná SantarémAltamira Juruti Lucas do Rio Verde Ribeirão Cascalheira CUIABÁ Rondonópoli s Itiquira GOIÂNIA Alto Araguaia Corumbá CAMPO GRANDE Maracaju Foz do Iguaçu Santana do Livramento 2,6 Rurópolis Miritituba Sinop Sorriso Fonte: CONAB / MDIC / ANTAQ Pres. Epitáci Cianorte o Pelotas Aceguá Rio Grande 1,6 Carajás Rio Paranaíba Estrela d Oeste Panorama PORTO ALEGRE Eclusa de Tucuruí Marabá Barcarena BELÉM PALMAS Uruaçu DF Limeira CURITIBA Porto de Paranaguá Porto de São Fco do Sul Araquari FLORIANÓPOLI S Imbituba Tubarão Açailândia Estreito Balsas Rio Balsas SÃO PAULO Porto de Rio Grande Porto de Itaqui SÃO LUÍS TERESINA Alto Boa Vista Figueirópolis Barreiras Ibotirama Luís Eduardo 13,7 Production of soybean + corn = 86%of the national grain production 6,3 Porto de P. Alegre 3,7 Caetité Brumado da Bahia Montes Claros BELO HORIZONTE Sabará RIO DE JANEIRO Sobral Gov. Valadares Porto de Santos Piquet Carneiro Macau Juazeiro Porto Real do Colégio VITÓRIA FORTALEZA SALVADOR Porto de Vitória 16,5 NATAL JOÃO PESSOA MACEIÓ RECIFE Porto de Salvador Porto de Ilhéus Ilhéus 24,7 5,6 Roads Rails Water Flow routes 0,2 2,1 Transhipment points Ports Soybeans Production 96,2 MT 29% PR 18% RS 15% GO 9% Export 48 Santos (SP) 22% Paranaguá (PR) 14% Rio Grande (RS) 9% Soybean Meal Export 14 Paranaguá (PR) 36% Santos (SP) 25% Rio Grande (RS) 14% Corn Production 81,8 MT 23% PR 19% GO 11% MS 10% Export 22 Santos (SP) 37% Paranaguá (PR) 17% Tubarão (ES) 10% Million ton 22

23 3 BNDES s support instruments

24 Framework conditions for infrastructure financing Economic and legal stability Detailed engineering information (reducing construction risk) Appropriate risk allocation Environmental licensing risk Unmanageable risks Agility in rebalancing the contract Developers Equity/ Mezzanine investors Attractive rate of return equity Grantor Concessionaire Users debt insurance Construction Strong demand Quality of service and affordable price BNDES Banks Capital Market Adequate financing structure (appropriated terms, competitive rates and collaterals) 24

25 BNDES financial support to logistics // 25 Components : (1) Credit (2) Debentures (3) Equity Objectives: Expand and modernize the transport infrastructure network Making the most economical and efficient logistics processes Promote low tariffs and increased competition among operators Integration of transport, in conjunction with the supply chains Beneficiaries: Concessionaires Economic groups with assets in logistics infrastructure and transport Ways to support(credit): DIRECT (over $ 20 million), INDIRECT (financial agents) or JOINT Project finance or financing with corporate collaterals (real and personal) Financing structuration: Corporate Finance Project Finance 25

26 Conditions for financing logistics BNDES Finem // 26 Direct operation: Financial cost TJLP/Market Basic spread: 1.5 or 1.2% p.a.* Credit risk rate* * up to 2,87% pa in accordance with company's rating Indirect operation: Financial cost TJLP/Market Basic spread: 1.5 or 1.2% p.a.* Financial intermed. 0,5% p.a. Financial agent s spread Term: usually 12 to 15 years * 1,2% p.a. for railways, waterways, ducts and 3PL s and for market conditions Loan-bridge: Until 30% from long term debt Corporative or bank guarantee Term: 18 months 26

27 Financing conditions TJLP increase with debentures issuance HIGHWAYS without debenture with maximum debenture issued 35% up to 70% 35% 30% 25% 10% 35% 30% PORTS without debenture 25% up to50% 25% 20% 30% with maximum debenture issued Finem TJLP 35% 10% 25% 30% TJLP additional (Pro-Logistica) Finem Market Associate Debenture of Infrastructure Equity/ Cash Flow 27 Finem Market Optional (others sources) 27

28 Financing conditions TJLP increase with debentures issuance AIRPORTS without debenture with maximum debenture issued 15% 15% up to 30% 40% 30% 35% 20% 15% 30% RAILWAYS and WATERWAYS up to 70% 70% 30% Finem TJLP TJLP additional (Pro-Logistica) Finem Market Associate Debenture of Infrastructure Equity/ Cash Flow 28 Finem Market Optional (others sources) 28

29 Standard project finance timeline Timeline Auction Contracts Signed/ Bridge Loan Approved LT Loan Approved Project Completion End of Concession Limited recourse Non-recourse Studies, project preparation, public consultation, approvals Equity and Mezzanine Debt (Strategic & Financial Investors) 3 to 6 months 6 to 12 months 30 months to 60 months Equity/Cashflow (20-30%) to 30 years total & Other Banks Bridge Loan Long Term Loan (35-70%) Financial Investors Infrastructure Bonds (10-35%) 12 a 48 months 29

30 BNDES credit enhancement conditions With bond issuance // 30 Shared guarantees Cross-default Amortization curve to be based on French Amortization System (Price Table) instead of Constant Amortization System. Increase of TJLP participation Support line of liquidity for debentures interest payment With partners insurance companies, working on a guarantee on demand 30

31 Infrastructure financing Guarantees structure // 31 Loan Tenure Debt service account (3 installments) Pledge of the SPC s shares Pledge of receivables and rights (including any indemnity payment) Step in rights Pre-Completion Post-Completion Commitment from shareholders (corporate guarantee, support agreement etc.) Package of insurance Bank guarantees (guarantees, liquidity lines etc.) Operational and Financial Covenants * Appropriate risk allocation allows a customized and balanced collateral structure 31

32 Equity Ways to support: Possibility of BNDESPar to subscribe shares and/or other convertible securities; Conditions for BNDESPar Participation: Minimum investment of R$ 100 million; Maximum participation: up to 20% of the holding company s equity outstanding; or 30% of the SPE s equity (the lowest value) Adoption of best governance practices; Liquidity mechanisms: joint sale (tag along), IPO prediction or sale option for the controller (put). 32

33 Challenges to financing // 33 Capital market attraction and co-financing Collaterals on pre-completion phase (capital market in the construction phase, credit enhancement) Enhance attractiveness to investment for infrastructure (competition for savings) Attract new players (foreign capital and financial investors) Improve sectoral regulatory framework Detailing reference projects in order to mitigate risks and assertiveness to cost and time Fiscal space for the feasibility of challenging projects (greenfield, railways) BNDES will keep its commitment to support the expansion of infrastructure 33