Brazil is framing its slow-moving privatization program as a way to protect forests and rivers following international investors’ mounting criticism of President Jair Bolsonaro’s environmental policies.
Martha Seillier, special secretary of the Investments Partnerships Program, said infrastructure building via concessions and privatizations not only represents good business opportunities but is also an environment-friendly strategy as the country battles a reputation damaged by surging deforestation rates and rampant forest fires.
“It’s not true that the Brazilian government doesn’t care about the environment,” Seillier said in a video interview. “The question is how we obtain the resources and solutions we need to preserve the environment.”
a woman wearing a blue shirt: Martha Seillier© via Bloomberg Martha Seillier
Recently-appproved legislation backed by the government to facilitate the privatization of water and sewage treatment will reduce river pollution and improve hygiene standards, and railways concessions will cut down on car dependence, she said, adding that wind and hydroelectric facilities are also opening to concessionaires.
“As big funds are increasingly seeking ESG portfolios, we have very significant green investment proposals,” she said of environmental, social and governance opportunities.
Brazil’s allure to investors was initially boosted by Bolsonaro’s pro-business agenda, but big European funds and businesses have recently started to express dismay over his environmental policies, which included minimizing forest fires raging across the country and defunding enforcement agencies. As their pressure mounted, the government switched strategies and is now calling on the private sector to help protect the Amazon.
Bolsonaro has yet to deliver on his ambitious privatization promises as plans to sell large state-controlled entities aren’t ready yet.
Considering the four-year presidential term, the main decisions were taken during the first year while the second one has been used for shaping the privatization models,” Seillier said. “If all goes well, next year is when auctions will actually take place.”
She cited asset managers Emgea and ABGF, food storage companies Ceagesp and CeasaMinas, and port manager Codesa as companies whose sales are likely to move faster next year. Postal service Correios and utility Eletrobras may also be privatized in 2021, pending congress approval, she said.
But currency volatility has kept investors wary. The Brazilian real has been one of the worst-performing currencies among emerging-market economies, largely due to investor concerns that Bolsonaro may break a constitutional spending cap to finance a new cash-transfer social program aimed at mitigating the effects of the pandemic.
Seillier said Bolsonaro’s pro-business agenda is not at risk and that the government will create a currency hedge for investors. “There will be a separate account to compensate currency fluctuations that may affect investment.”

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