The Logistics Investment Program

The Logistics
Investment
Program:
A Strategic Project
of the Brazilian State
Infrastructure in Brazil: Projects, Financing and Opportunities
Highways
Infrastructure in Brazil: Projects, Financing and Opportunities
OBJECTIVES
Highways
• Duplication of main roads
• All duplications during the first 5 years
• New concessions: complementary to
awarded and upcoming concessions
Infrastructure in Brazil: Projects, Financing and Opportunities
Investment Opportunities – Highways
9 lots
7,500 km
Infrastructure in Brazil: Projects, Financing and Opportunities
Highway Concessions
• Estimated Total Investment: US$ 21 billion
(US$ 12 billion over 5 years)
• Concession Term: 30 years
• Tolling after completion of 10% of the
duplication
• Leveraged IRR: ~15% p.a.
• Winning bidder: lowest toll rate
Infrastructure in Brazil: Projects, Financing and Opportunities
Schedule
Highway Concessions
Auctions
Release of Bid Notices
Jul
Aug
2013
Infrastructure in Brazil: Projects, Financing and Opportunities
Sep
Highway Concessions – Public
Financing
Special financing conditions:
Real Interest rate: up to 2.0% p.a.
Grace period: 5 years
Amortization: 20 years
Infrastructure in Brazil: Projects, Financing and Opportunities
Degree of
Leverage:
Up to 80%
Railways
Infrastructure in Brazil: Projects, Financing and Opportunities
OBJECTIVES
Railways
• New model of investment/exploration of
railways
• Breaking of monopoly in the provision of
rail transport services
• Expansion, modernization and integration
of Brazil’s railway network
Infrastructure in Brazil: Projects, Financing and Opportunities
Investment Opportunities – Railways
10,000 km
Infrastructure in Brazil: Projects, Financing and Opportunities
Railway Concessions
PRIVATE EXPLORATION OF INFRASTRUCTURE
• Estimated Total Investment: US$ 46 billion (US$ 28 billion over
5 years)
• Construction, maintenance and control of trains circulation
• Concession Term: 35 years
• Leveraged IRR: ~ 16% p.a.
RISK OF DEMAND MANAGED BY THE PUBLIC SECTOR
• Purchase of the full capacity of the railway guaranteed by the
government
• New players: Independent rail operators
• Capacity will be sold through public offers
• Open access along the whole rail network
Infrastructure in Brazil: Projects, Financing and Opportunities
Investing in Railways – Public
Financing
Special financing conditions:
Real Interest rate: up to 2% p.a.
Grace period: 5 years
Amortization: 25 years
Infrastructure in Brazil: Projects, Financing and Opportunities
Degree of
Leverage:
Up to 80%
Schedule
Railway Concessions
Auctions
Release of Bid Notices
Jul
Aug
Sep
Oct
2013
Infrastructure in Brazil: Projects, Financing and Opportunities
Nov
Dec
High Speed Train (TAV)
Infrastructure in Brazil: Projects, Financing and Opportunities
OBJECTIVES
High Speed Train (TAV)
• Structural intervention in transportation
along the Rio-São Paulo axis
• New standard for passenger
transportation: modern and efficient
• Technology transfer
Infrastructure in Brazil: Projects, Financing and Opportunities
High Speed Train (TAV)
Rio de Janeiro - Campinas
Infrastructure in Brazil: Projects, Financing and Opportunities
TAV Rio de Janeiro – Campinas st
1 Phase – Public Financing
Special financing conditions:
Financing (70% of CAPEX): ~US$ 2.5 billion
~1.5% p.a., total term 30 years
• Divided into sub-credits with different grace periods
Equity (30% of CAPEX): ~US$ 1 billion
• Public Share: ~US$ 450 Million
• Private Share: ~US$ 550 Million
* TJLP: Brazil Long Term Interest Rate
Infrastructure in Brazil: Projects, Financing and Opportunities
TAV Rio de Janeiro – Campinas st
1 Phase
Economic and Financial Modeling Assumptions
• Maximum economy class rate in the Rio-Sao Paulo axis:
US$ 100
• Concession Term: 40 years from the beginning of
operation
• Start of commercial operation: Jul/2020
• Degree of Leverage: 70% debt and 30% equity
• Tax benefits: ICMS, PIS, COFINS and REIDI
Infrastructure in Brazil: Projects, Financing and Opportunities
TAV Rio de Janeiro – Campinas st
1 Phase – Economic Modeling
Summary of Results:
Leveraged IRR – ~14%
Leasing (equiv. rail Km) – US$ 35.15
Current Lease Value Paid - ~US$ 14 billion
Infrastructure in Brazil: Projects, Financing and Opportunities
Schedule
TAV Rio de Janeiro – Campinas – 1st Phase
Auction Ratification
TCU* and Public
Hearings
Signing of Contract
Preparation of
Proposals
Sep Oct Nov Dec Jan
2012
* TCU: Brazilian Court of Audit
Infrastructure in Brazil: Projects, Financing and Opportunities
>
Aug Sep Oct Nov Dec Jan Feb
2013
2014
Summary
• Great opportunities for investing in Brazil`s
infrastructure:
• Concessionaires
• Strategic shareholders
• Private equity funds
• Debt holders
• Suppliers and logistics companies
Infrastructure in Brazil: Projects, Financing and Opportunities
Summary – cont.
• Different concession models for different
sectors in order to provide:
•
•
•
•
•
Sound projects
High IRR
Low and manageable risk
Public loans to structure financial feasibility
Environmental feasibility
Infrastructure in Brazil: Projects, Financing and Opportunities
Contact
Executive Secretariat for Investor Assistance
Planning & Logistics Company - EPL
Tel: +55 (61) 3426-3723
Email: [email protected]
Website: http://logisticsbrazil.epl.gov.br
Infrastructure in Brazil: Projects, Financing and Opportunities