Brazil Infrastructure Investment Opportunities Tokyo, 1.3.2011 Guilherme Walder Mora Ramalho Infrastructure Advisor Executive Office of the President of Brazil
PAC Growth Acceleration Program In 2007 PAC 1 To accelerate the pace of economic growth To increase employment and income rates To decrease social and regional inequalities To overcome infrastructure bottlenecks In 2009, a new goal To reduce the impact of the international economic crisis countercyclical policy In 2011, a new stage: PAC 2 2011-2014
GROWTH ACCELERATION PROGRAM PAC 1, 2007-2010 Infrastructure projects in three areas US$ billion Area 2007-2010 After 2010 TOTAL LOGISTICS 54.5 28.9 83.3 POWER G&T 171.7 429.4 601.1 SOCIAL AND URBAN 146.8 18.0 164.9 TOTAL 373.0 476.3 849.3
GROWTH ACCELERATION PROGRAM PAC 2, 2011-2014 Preliminary investment forecast US$ billion Area 2011-2014 After 2014 TOTAL LOGISTICS 59.4 2.6 61.9 POWER G&T 262.3 356.2 618.5 SOCIAL AND URBAN 221.0-221.0 TOTAL 542.6 358.8 901.4
INVESTMENT OPPORTUNITIES: POWER GENERATION AND TRANSMISSION HIGHWAYS RAILROADS AIRPORTS PORTS URBAN MOBILITY HOUSING AND SANITATION
ELECTRIC POWER GENERATION AND TRANSMISSION
ELECTRIC POWER SYSTEM GENERAL FEATURES Installed Capacity 105,066 MW Number of Customers 64.6 million Energy Production 463.2 TWh / year 60% of South America Peak 67,632 MW Transmission Lines 96,207 km 230kV Source: Ministry of Mines and Energy
ELECTRIC POWER GENERATION Priority to competitive, renewable sources with low carbon emission Annual tenders to contract energy in the regulated contracts environment Hydroelectric power plants energy to be delivered at the fifth year after the tender Thermal power plants and others energy to be delivered at the third year after the tender Tenders planned 2011-14 54 HPP 47,870 MW US$ 57.9 billion
ALTERNATIVE ENERGY SOURCES From 2011 to 2014 71 Wind Power Plants 1.803 MW 3 Biomass TPP 224 MW TOTAL PROJECTED INVESTMENT- US$ 5.5 billion
TRANSMISSION LINES Large Interconnections 22.765 km Regional Lines 13.921 km TOTAL PROJECTED INVESTMENT- US$ 14 billion
Alternative Energy Sources Wind Power Aratua 1 Areia Branca Miassaba 3 Coqueiros Quixaba Garças Lagoa Seca Vento do Oeste Dunas do Paracuru Taíba Águia Taíba Andorinha Icarai I e II Araras Buriti Cajucoco Morro dos ventos I, III, IV, VI, IX Rei dos Ventos 1, 3 Eurus VI Colonia Embuaca Cabeco Preto Mangue Seco 1, 2, 3 e 5 Sangradouro 3 Sangradouro 2 Osório 2 Fazenda Rosário 3 PAC 2 Barra dos Coqueiros Mar e Terra Santa Clara I Guirapa Guanambi Igapora Candiba Serra do salto Alvorada Ilheus Pindai Pedra do Reino Seabra Macaubas Pajeu do vento Coxilha Negra V Coxilha Negra VI Coxilha Negra VII Fazenda Rosário Planaltina Porto Seguro Rio Verde Faisa I, II, III, IV e V Icarai Santa Clara II, III, IV, V e VI Nossa Senhora da Conceição Licinio de Almeida Novo Horizonte
Alternative Energy Sources Biomass UTE Unid. Bio. Morro Vermelho UTE São João da Boa Vista UTE Boa Vista UTE Ben Bioenergia UTE Unid. Bio. Água Emendada UTE Quirinópolis (1ª etapa) UTE Quirinópolis (BC) UTE Baia Formosa UTE Porto das Águas UTE Angélica UTE Rio Brilhante F. I e II UTE Jataí UTE Cachoeira Dourada UTE Codora UTE Paraúna UTE Caçu I UTE Unid. Bio. Alto Taquari UTE Chapadão Agroenergia UTE Ferrari UTE Santa Isabel BC UTE Santa Luzia I UTE Lagoa da Prata F. I e II UTE CBB UTE Costa Pinto BC UTE Vale do Tijuco UTE Vale do São Simão UTE São José BC UTE Unid. Bio. Costa Rica UTE São Fernando UTE Bonfim UTE Iacanga UTE Ipaussu Bioenergia UTE Noble UTE Decasa UTE Pioneiros II BC UTE Santa Cruz AB F.I e II UTE Clealco- Queiroz UTE Colorado BC UTE Noroeste Paulista UTE Destilaria Andrade UTE Ester UTE Bevap UTE São João Biogás UTE UTE Interlagos Cocal II UTE Biopav II UTE Flórida Paulista BC UTE Barra Bioenergia UTE Rafard BC UTE Quatá BC UTE Conquista do Pontal UTE São Luiz PAC 2 PAC 1 PAC 1 com conclusão original após 2010
OIL AND GAS Exploration, Production and Natural Gas Transport Infrastructure
PRODUCTION AND EXPLORATION Increase oil and gas production Seismic assessment, drilling, plataform production To explore the reserves and enlarge national production, including the new Pre-Salt discoveries Value chain: naval industry, mecanic engineering, steel, chemical, precision engineering among other US$ 418,5 billion 2011-2014 US$ 110.4 billion after 2014 US$ 308 billion
PRODUCTION AND EXPLORATION Pre-Salt Reserves around 10.6 a 16 billion barrels of oil equivalent (boe) Total Pre-salt área: 149 mil km² Jubarte Parque das Baleias Sep/2008 first pre-salt production SÃO PAULO Carioca, Abaré e Iguaçu RIO DE JANEIRO Parati Iara C-M-101 Corcovado Bem-Te-Vi Caramba Azulão Guará Tupi, Iracema Júpiter
REFINEMENT, PETROCHEMESTRY and FERTILIZER Refinaria Premium I Refinaria Clara Camarão Refinaria Premium II Refinaria Abreu e Lima Petroquímica Suape PTA Petroquímica Suape PET POY FAFEN-SE Sulfato de amônio Fabrica de Amônia Fábrica de Fertilizantes Nitrogenados III Complexo Químico UFN-4 Complexo Petroquímico do Rio PAC 2 PAC 1 PAC 1 com conclusão original após 2010 US$ 76.6 billion 2011-2014 US$ 41,8 billion Pós 2014 US$ 34,71 billion
HIGHWAYS
PAC 2 2011 2014 - HIGHWAYS Preliminary investment forecast Total - US$ 29 billion Type of investment Km Construction 8.000 Maintenance 55.000 Projects 12.600
FEDERAL HIGHWAY CONCESSION PROGRAM Central-South Region 54% of Brazil s GDP Length: 2,212.4 km BR-040/Distrito Federal-Goiás-Minas Gerais 937 km BR-116/Minas Gerais 817 km BR-101/Espírito Santo 458.4 km Total Investment: US$5.5 billion GO BR-040 DF BR-116 BR-101 Concession bidding 1nd Half, 2011 MG Governador Valadares Belo Horizonte ES Vitória
CONCESSION MODEL Internal Rate of Return: 8.0% per year Reference value used on the 3 rd Phase of the Federal Highway Concession Program Term of Concession: 25 years Annual tariff adjustment according to inflation variation Investments described in the Highway Usage Program Constructions required (recovery, duplication, lighting, and others) Constructions conditioned to the volume of traffic (to expand capacity) Performance Parameters: paving, safety, signage, lighting, user assistance, and others. Focus on service quality Concessionaire performs the necessary investments in the most efficient way to meet the Performance Parameters *Allows the participation of Brazilian or foreign companies, financial institutions, pensions funds and private equity funds, separately or in consortiums
BR-040/DISTRITO FEDERAL-GOIÁS- MINAS GERAIS Connects the federal capital, Brasília, to two important cities: Belo Horizonte and Rio de Janeiro Length: 937 km Toll Plazas: 12 Basic Tariff US$ per 100 Km: 2.1 Toll*: US$ 1.4 Total Investment: US$1.8 billion GO BR-040 MG DF Belo Horizonte Concession bidding 1nd Half, 2011 *Prices on January, 2007
BR-116/MINAS GERAIS Important South-Southeast connection with the Northeast Length: 817 km Toll Plazas: 8 Basic Tariff US$ per 100 Km: 3.1 Toll*: US$ 3.5 Total Investment: US$2.3 billion MG BR-116 Governador Valadares Concession bidding 1nd Half, 2011 *Prices on January, 2007
BR-101/ESPÍRITO SANTO Connecting corridor linking RJ, SP and BA states, tourism hubs with high traffic volume. Crucial to cargo transportation Length: 458.4 km Toll Plazas: 7 Basic Tariff US$ per 100 Km: 3.7 Total Investment: US$1.4 billion Concession bidding 1nd Half, 2011 BR-101 ES Vitória
RAILROADS
PAC 2 2011 2014 RAILROADS Preliminary investment forecast Total - US$ 26 billion Type of investment Km Construction 4.700 Studies 2.985 High Speed Train 1.991
RAILROAD CONCESSION PROGRAM Participation in bidding processes North-South Railroad East-West Integration Railroad High-Speed Rail
NEW CONCESSION AND USAGE MODEL FOR NEW RAILROADS In study by the Government Separation of Infrastructure and Operations: VALEC is a public company which is the concessionaire for the North-South, East-West Integration and Midwest Integration Railroads Infrastructure management would continue to be under VALEC s responsibility, and totally separated from the operation The operation concessionaire (logistics operator) would acquire the right-of-way to use a preset number of tracks Goal is to optimize the usage of the railroad and reduce costs due to the efficiency gains
Port of Vila do Conde /PA Port of Itaqui/MA São Francisco Waterway Palmas/TO Figueirópolis/TO Anápolis/ GO Ilhéus/BA Estrela D Oeste/SP Port of Santos/SP Port of Itaguaí/RJ
NORTH-SOUTH RAILROAD SOUTH SECTION Port of Itaqui / MA 33% of Brazilian agricultural production 72% of agricultural land Large mineral reserves Outflow of the agro-industrial and mineral production to four ports Peru Açailândia Aguiarnópolis Araguaína Palmas Alvorad a Uruaç u Anápolis Santa Fé do Sul Araguaína Palmas Açailândia Aguiarnópolis North Section Length: 1,525 km Uruaçu South Section Anápolis Bidding for the logistic operator 1st Half, 2011 Estrela D Oeste (SP) Section to be Concessed Concessed Section
EAST-WEST INTEGRATION RAILROAD Outflow of the agricultural and mineral production Waterway integration Port of Vila do Conde / PA Port of Itaqui / MA Length: 1,527 km Figueirópolis (TO) Ilhéus (BA) Bidding for the logistic operator 1st Half, 2011 Port of Santos / SP Port of Itaguaí / RJ
HIGH-SPEED RAILS PLANNED Resende 36 million inhabitants São José dos Campos Taubaté Metropolitan Region of Campinas Volta Redonda Metropolitan Region of São Paulo Metropolitan Region of Rio de Janeiro Market Potential Metropolitan Region of São Paulo: 19 million inhabitants Metropolitan Region of Rio de Janeiro: 12 million inhabitants Metropolitan Region of Campinas: 2.5 million inhabitants Campinas - São Paulo - Rio de Janeiro 511 km Concession bidding 1st Half, 2011 Economic Importance Rio de Janeiro and São Paulo States concentrate 45 % of Brazil s GDP São Paulo is Latin America's biggest financial center, concentrating 70% of the stock market Rio de Janeiro is the biggest Brazilian tourism hub
HIGH-SPEED RAIL HSR Project scope Estimated investment: US$19.7 billion Deadline for operation start: 2016 Concessionaire responsible for the design, construction, operation and maintenance, complying with technical performance parameters; Auction to be open to all existing technologies Compulsory technology transfer Public sector participation: own capital and financing Documentation available at www.tavbrasil.gov.br Technical studies on demand, alignment, geology, operation and economic-financial modeling completed and available
WORLD CUP 2014 HOST CITIES Manaus Fortaleza Natal Recife Cuiabá Salvador Brasília Curitiba São Paulo Belo Horizonte Rio de Janeiro Porto Alegre
RESPONSIBILITY ASSIGNMENT MATRIX Issue Ports Passenger Terminals Airports Passenger Terminals and Lanes Stadiums Construction, reform and maintenance Urban Mobility Hotels Responsible Federal Government Federal Government States and Municipalities States and Municipalities Private sector Federal Government financing
AIRPORTS
AIRPORTS Guidelines To provide airports a structure suitable for: Ensuring quality care and users comfort Meet the projected increased demand Improving the conditions for operational safety: Lane, yard, control tower Technological upgrade of the operating systems Total: 25 airports
AIRPORTS Historical Demand 1997 : 0.3 passengers carried per capita (163.8 million) 2008 : 0.6 passengers carried per capita (189.6 million) 6 milions of new passengers in 2009 After 2003: growth of 10% on passengers carried per capita Number of passengers: Million boardings + landings + connections 55 11 63 10 63 9 4% py 68 10 9 9 53 54 58 65 66 71 61 44 74 75 71 10 82 11 96 13 10% py 102 12 83 90 111 113 13 13 98 100 128 13 115 59% 80% 97 98 99 00 01 02 03 04 05 06 07 08 09 International Domestic Fonte: EMBRATUR
WORLD CUP HOST CITIES AIRPORTS US$ Million, Preliminary Airport Belo Horizonte Brasília Cuiabá Curitiba Fortaleza Manaus Natal Porto Alegre Recife Rio de Janeiro Salvador São Paulo Total Investment 240,4 440,2 51,5 42,8 164,4 192,6 334,6 203,4 11,6 404,3 26,5 1153,8 3.266,2 Considering Guarulhos (US$720 million) and Viracopos (US$ 410 million)
AIRPORTS
PORTS
PORTS - World Cup Complementary investments to PAC Focus on passengers terminals Host cities with projected deficit in number of beds
PORTS CONSTRUCTION AND MODERNIZATION US$ 2.9 billion Build and modernize docks, piers, terminals, improve aquatic and land access Debureaucratization of port operations Passengers Terminals for the World Cup 2014 Reduced logistics costs Better operational efficiency Increased competitiveness Encourage private investments 48 PROJECTS 21 PORTS - US$ 2.9 billion Ventures Quantity Dredging 12 Port Infrastructure 24 Logistics Intelligence Systems 5 Passengers Terminals World Cup 2014 7
URBAN MOBILITY
URBAN MOBILITY PAC 2 - Subway, LRT, BRT and bus lanes 1 st Phase US$ 6.8 billion launched Feb 16 th World Cup - projects selected in December 2009 Federal Government Financing Execution by state and city governments 2 nd Phase US$ 10.2 billion Public transportation systems in major urban centers US$ billion Investment Union Budget 3.4 Financing 6.8 TOTAL 10.2
URBAN MOBILITY WORLD CUP Summary per Modal US$ Million Modal Qty Project Value Financing Subway 2 21 20 Bus Terminals 3 38 36 Monitoring 3 66 66 VLT 2 370 312 Bus Corridors 18 1,138 1,067 Monorail 2 2,449 989 BRT 20 2,735 2,098 Total 50 6,817 4,587
URBAN MOBILITY FINANCING WORLD CUP Deadline: 4 years of grace period after signing the contract 20 years to repay after the grace period (30 years for public rail transport) Scope: Light Rail Trains (LRTs), Monorail and Bus Rapid Transit (BRT)
STADIUMS
STADIUM FINANCING Main financing characteristics: Amount: Up to 75% of the project value, limited to R$400 million Term: 3 years of grace period after signing the contract 12 years to repay after the grace period
STADIUMS SITTUATION Intervention Investment (R$ million) Capacity (thousand) Cost per seat (R$ thousand) Privatelyowned Curitiba Porto Alegre São Paulo Reform Reform Reform 184.5 41 4.5 130.0 62 2.1 555.0 72 7.7 R$ 0.87 billion B. Horizonte Reform 426.1 70 6.1 Brasília Reform 745.3 69 10.8 Government- Owned Manaus Cuiabá Reconstruction Reconstruction 515.0 44 11.7 454.2 45 10.1 R$ 3.09 billion R. Janeiro Reform 600.0 83 7.2 Natal Construction 350.0 45 7.8 Fortaleza Reform 623.0 60 10.4 Public-private partnership Salvador Recife Reconstruction Construction 591.7 50 11.8 529.5 46 11.5 R$ 1.74 billion Total 5,704.3 687 8.3 (*) Considering the basic design values. Including the constructions around the stadiums at São Paulo and Curitiba.
HOUSING AND SANITATION
MINHA CASA, MINHA VIDA PROGRAM 1st phase 2009-2010 US$30.7 billion Production of 1 million homes to families with income up to US$2,784 equivalent to 14% of the housing deficit Subsidies for low-income families (up to US$1,670 per month) Long-term government partnership with private investors Establishment of a Guarantee Fund to reduce risks and costs 2nd phase 2011-2014 US$40.3 billion Production of 2 million homes
SANITATION PAC 2 Water treatment Sewage and waste treatment Projects and studies To expand sewage collection and treatment system Improve waste treatment and reduce environmental damage TOTAL PROJECTED INVESTMENT- US$ 12.6 billion
Brazil Infrastructure Investment Opportunities Tokyo, 1.3.2011 Guilherme Walder Mora Ramalho Infrastructure Advisor Executive Office of the President of Brazil