Project Structuring

With the consolidation of the regulatory framework for public service and public-private partnership concessions, the governmental bodies were able to increment investment efforts through partnerships with the private sector. The BNDES participates in the structuring of projects and assists the public body in the preparation of public calls-to-bid. The Bank prioritizes structuring projects in the infrastructure sector, both in its traditional way (such as highways, airports, railroads, sanitation etc.), as well as in social areas (health, education etc.), which have a high transformation potential and can be replicated by governmental bodies for concession of services in that specific field. Thus, the BNDES contributes to the development of the country and also to the training of a technical staff with a capacity to manage the long-term projects.

Demands from governmental bodies, interested in making public concession feasible (whether it is a traditional concession or a public-private partnership), arrive at the BNDES directly from governments benefiting from projects. The Bank operates together with partners, such as: the Brazilian Project Structuring (EBP)    and the Development Program for Private Participation Fund (PFPP), in cooperation with the Inter-American Development Bank (IDB) and the International Finance Corporation (IFC) of the World Bank (the PFPP is managed by the IFC) [1].
To structure the projects, consultants with specific technical qualification are hired. Their objective is to conduct technical, economic, environmental and legal feasibility studies. These studies are developed together with the BNDES team and the applying public agency to later serve as reference to private investors who will participate in the public bid in the future concession or public-private partnership (PPP).

The BNDES also relies on the Project Structuring Fund (PSF), created to enable, through non-reimbursable loans, technical studies or research related to Brazil and Latin America’s economic and social development, which may offer guidance when making public policy.

Efforts to structure projects in 2011

The BNDES’ efforts go beyond projects of great visibility, such as the High-Speed Train or the World Cup Stadiums. Below, we highlight projects the Bank is taking part in:

Studies concluded in 2011 (public calls-to-bid not published in 2011)
  • Highway concessions: studies conducted by the BNDES for the National Land Transport Agency (ANTT), with the purpose of structuring the 3rd Stage – Phase 1 of the Federal Highway Concession Program (highways BR-040, BR-116, located in the state of Minas Gerais).
  • Interoceanic Railway: a technical study financed by the Project Structuring Fund (BNDES FEP) to produce and systematize information that can be applied to making feasible a railway that connects ports in Southern and Southeastern Brazil to ports in Chile running through Paraguay and Bolivia.
  • Parking lots in the cities of Belo Horizonte and São Paulo: studies developed in partnership with the EBP for concession to private construction, operation and maintenance sectors, in each city, including 10 underground parking lots, with over 4,000 parking spaces.
  • Copasa: a study developed with the EBP, aimed at expanding one of the water treatment and supply systems for the metropolitan area of Belo Horizonte (the Rio Manso (river) System) by 45%.
Public calls-to-bid published/held in 2011
  • High-Speed Train: the BNDES advised the Federal Government in the procedures necessary to implement the project and continues to help structuring the new model to be implemented at the beginning of 2012.
  • Highway Concessions: the BNDES also provided advisory services, in partnership with the EBP, the ANTT and the Ministry of Transport, in the study for the concession of the 476-km section of highways BR-101, starting at the border of the states of Rio de Janeiro and Espírito Santo up to the access to the municipality of Mucuri (state of Bahia). The section is part of the Federal Highway Concession Program.
  • Airport Concessions: the International Airport of São Gonçalo do Amarante (in the state of Rio Grande do Norte) (Asga): the BNDES coordinated the studies for the concession of the ASGA airport. The auction was held on 08.22.2011 and the winning bid exceeded the minimum bid by 228.8%.
  • Airport Concessions: the Guarulhos International Airport (GRU), Viracopos (VCP) and Brasília (BSB): the BNDES and the EPB developed technical studies for the concession of these airports, whose concession periods will be of 20, 30 and 25 years, respectively. Infraero will own 49% of the special purpose company shares (SPEs), which will operate such concessions.
  • Primary Health Network in Belo Horizonte: the project was developed with resources from the Multilateral Fund. It is a PPP, in the administrative concession modality to render support services for the operation of the network, which will comprise 168 health centers, one center for sterilized material, and one diagnosis support unit.
  • Metropolitan Hospital: in a partnership with the EBP, studies for concession of the Metropolitan Hospital of Belo Horizonte were concluded, which resulted in the auction on 02.15.2011.
  • Expansion of the Belo Horizonte Educational System: the Multilateral Fund, with the BNDES’ support, is acting together with the Belo Horizonte City Council to develop a PPP for the construction and operation of non-pedagogical services in 32 municipal preschools and five municipal elementary schools. This project is part of Belo Horizonte’s Strategic Plan. In September of 2011, a public hearing was held regarding the project.
  • Sanitation: studies were concluded in partnership with the EBP for the sanitation project in the Western Zone of the city of Rio de Janeiro (AP-5), which will benefit 1.8 million residents. The auction was successfully held on 11.23.2011.
  • Belo Horizonte Bus Terminal: a project developed together with the EBP aimed at the concession for building, operating and maintaining the new Bus Terminal outside the city’s downtown area. The auction was successfully held on 11.9.2011.
Financing projects derived from studies/public calls-to-bid
  • New Mineirão: a stadium ahead of time: among the BNDES’ efforts in structuring projects, one of them is noteworthy. It is the Mineirão stadium, chosen as one of the stadiums for the Confederations Cup and the 2014 World Cup semifinals. Ensuring that everything would be ready on time – from the drafting of the project to the delivery of the stadium, including the concession bidding process – was one of the major challenges of this job. The project had to present flexible technical solutions that allowed its use not only during the World Cup, but during the entire concession period, offering products that met the public’s expectations and could guarantee attractive remuneration for the future operator.

    The winning consortium, Minas Arena, presented the highest discount rate (7.5%) over the value estimated in the public call-to-bid. It may operate the stadium for 27 years, two of which are for modernization works, and the forecast is that it will invest R$ 698 million.

    In this case, the BNDES also granted R$ 400 million in financing from the BNDES ProCopa Arenas program. The stadium’s construction work is ahead of schedule, and it is planned to be delivered in late 2012.

    When it is inaugurated, the new Mineirão will have capacity for 62,000 people, parking for approximately 2,500 cars, a museum and new restaurants.

1. The EBP is a corporation formed by several banks to develop infrastructure projects that contribute to Brazil’s economic and social development, creating investment opportunities for the private sector.