Major FDI projects in Brazil
Major FDI projects in Brazil include the construction of a palm mill and the Rio-Valadares highway, according to UNCTAD data.
While Empresas Copec (Chile) is building the palm mill, the Rio-Valadares highway in Brazil is sponsored by EcoRodovias (Brazil) and Logistica (Italy).
Brazil captured flows of 86.05 billion dollars of Foreign Direct Investment (FDI) in 2022, a year-on-year increase of 69.9% and its second highest amount.
Previously, the trend for this indicator was as follows: 2018 ($59.802 billion), 2019 ($65.386 billion) and 2020 ($28.318 billion).
FDI projects
In 2022, the Ceará Costa Nordeste, a US$9.462 million offshore wind farm, and Infovia, a US$438 million digital fiber optic project, were announced in that country.
Simultaneously, last year, Brazil enacted a decree extending tax relief for investment in social or green bonds in qualified projects to both individual investors and companies.
This policy resulted in a significant increase in the issuance of green and social bonds in the country, with more than US$11 billion issued in the second half of the year.
On the other hand, between 2019 and 2022, the Programa de Parcerias de Investimentos (PPI) included 168 active projects, totaling R$908.5 billion in investments, including 49 airports, 35 ports, 7 highways and 7 railway concessions.
In addition, the federal government will assist states and municipalities in the implementation of several other water supply and waste disposal concession projects.
On May 18, 2022, the Federal Court of Accounts (Tribunal de Contas da União, or TCU) approved, by 7 votes to 1, the privatization model of Eletrobras, a state-owned company considered the largest energy company in Latin America.
This was the last pending step for the government to carry out the privatization process of the company.
On June 14, 2022, the privatization of Eletrobras was officially completed with a ceremony at the B3 stock exchange.
Brazilian economy
As of February 28, 2023, the country’s current account recorded a deficit of US$54.41 billion (2.78% of GDP) in the previous 12-month period.
For the same period, the capital account had a surplus of approximately US$275 billion, the financial account recorded a deficit of US$56.1 billion and FDI amounted to US$88 billion (4.49% of GDP).
Brazil’s total official reserves decreased from US$363.7 billion in 2021 to US$337.7 billion in 2022, mainly due to a lower return on investment of international reserves as a result of market factors, such as higher interest rates and the appreciation of the U.S. dollar against other currencies that make up international reserves (approximately 8%).
As of March 30, 2023, the volume of international reserves amounted to US$340.81 billion (17.57% of GDP).
