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GLOBAL INFRASTRUCTURE

Infrastructure
Opportunities in Brazil
Primary & Secondary Markets
kpmg.com/BR
June 2015

Why Invest in Brazil?

2015 KPMG Consultoria Ltda., a Brazilian society and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. Printed in Brazil.

Why Invest in Brazil?


Brazil economy overview and perspectives
Largest country in South America, 5th largest country in the world and the 7th largest economy in the world
In 2014, Brazils GDP reached R$ 5.5 trillion (USD 2.1 trillion), as the 7th largest economy in the world. By 2023, Brazil is expected to
become the 5th largest economy.
During the next years Brazil should deliver strong growth on its GDP due to (i) strong Infrastructure investments and (ii) growing
consumer market.

Northeast
North

Region

Central-West
Southeast

South

Population

% GDP

North

17 million

5%

Northeast

56 million

13%

Central-West

15 million

9%

Southeast

85 million

56%

South

29 million

17%

Total

202 million

100%

Source: International Monetary Fund, 2015; Central Bank of Brazil, 2015; Centre for Economics and Business Research (CEBR), 2014; IBGE, 2015
2015 KPMG Consultoria Ltda., a Brazilian society and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. Printed in Brazil.

Why Invest in Brazil?


Investment in infrastructure
Despite its increased demand, Brazil has been investing only around 2.2% of its GDP in infrastructure, much less than other
emerging nations, leaving a great opportunity for private investments in the infrastructure sector
Investment in infrastructure
In 2013, the investment in infrastructure in Brazil amounted to
around 2.1% of the GDP, a small amount if compared with other
emerging nations.

Investment in Infrastructure x GDP


13,4%
10,3%
7,3%

Other BRICS nations, such as China and India, invest far more in
infrastructure then Brazil, with investments of 13.4% and 4.5% as
a percentage of the GDP, respectively.
Despite the big rise in consumption, Brazilian level of investment
in infrastructure has been at similar levels for the last 5 years,
creating an accumulated deficit in infrastructure that must be
addressed.

5,1%

4,8%

4,2%
2,2%

China
(2010)

Vietnam
(2009)

China
(2003)

Chile
India
Peru
Brazil
(2008-11) (2009-10) (2008-11) (2008-13)

Investment in Infrastructure in Brazil (% GDP)

To reach a proper level of investment in infrastructure, Brazil


should invest a minimum of 5% of the GDP in the sector.
In order to address this deficit, the Brazilian Government has
been taking several measures with the aim of boosting
investments in infrastructure in the country.

minimum necessary for sustainable growth: 4%


3,7%
2,2% 1,8% 1,9% 1,9% 2,0% 1,9% 2,0% 2,2% 2,2% 2,3% 2,3% 2,1%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: IBGE; Frischtak, 2012 Brasil e China: Perspectivas


2015 KPMG Consultoria Ltda., a Brazilian society and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. Printed in Brazil.

Why Invest in Brazil?


Investment in infrastructure
From 2015 to 2018, according to BNDES, investments in infrastructure are expected to amount to BRL 598 billion, a 31%
increase in relation to the period between 2010 and 2013
Future investments
According to the Brazilian Economic and Social Development
Bank (BNDES), investments in infrastructure in the country are
expected to amount to R$ 598 billion in the period that goes from
2015 to 2018, an increase of 31% in comparison with 2010-2013.

Investments in Infrastructure in 2015-2018 (BRL billion)

TOTAL

598

Power

This estimate encompasses projects and strategic investment


plans of companies, not restricted to those supported by the
bank, and include investments made through concessions and
public-private partnerships in the road, railway, port and airport
segments.
Furthermore, investments in the industrial sector are also
expected to increase.
From 2015 to 2018, it is expected that investments in industry
will increase by 19%, reaching R$ 909 billion. Out of this amount,
R$ 509 billion corresponds to investments in the oil and gas
sector.
This investments will continue to pressure Brazilian infrastructure
in the future, creating several opportunities for investments in the
infrastructure sector.

192

Telecommunications

141

Social Infrastructure

87

Highways

80

Railways

45

Ports

36

Airports

16

Source: BNDES Investment Perspectives (Perspectivas de Investimento), December 2014


2015 KPMG Consultoria Ltda., a Brazilian society and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. Printed in Brazil.