Dubai: Saudi Arabia’s Public Investment Fund (PIF) announced a multi-billion-dollar partnership with Patria Investments for a Brazil transport project on Thursday.
The two firms partnered in a consortium to secure a 30-year concession for the capacity extension and operation of a major new brownfield toll road project in the Brazilian state of Parana.
PIF, the Saudi sovereign wealth fund, won the the toll road project with Patria through an official auction held by the Brazilian government. The project is part of a US$1.2bn capital expenditure investment.
The new road represents 473km in the existing toll highway system in Parana, one of the largest and most prosperous states in Brazil, with all associated operations overseen by Patria and PIF until 2053 as per the agreement.
Running from Curitiba to Guarapuava and connecting Ponta Grossa with São José dos Pinhais, the toll road capacity extension is set to be a relevant capacity boost to Parana’s current transport infrastructure and highway links that serve the southern Brazilian state.
Home to more than 11.5 million people, Parana is ranked as one of the top-five performing states nationally with a yearly GDP of $130 billion.
As the first major infrastructure management auction launched under the administration of Brazilian President Luiz Inacio Lula da Silva, the project reflects growing economic ties between Latin America and Gulf Cooperation Council (GCC) countries including KSA, particularly in terms of direct investment and strategic long-term partnerships.
Increased GCC interest in Latin America
Patria’s successful partnering with PIF taps into a growing appetite from GCC nations and sovereign funds to enter Latin America. Patria’s knowledge and capabilities in managing a diverse network of assets means GCC-based partners are now able to explore varied investments in a broad range of sectors that would otherwise sit outside of their usual scope of interest and expertise.
Patria’s funds currently operate over 4,000km of toll roads through which about 230 million vehicle pass every year.
The toll road project also builds on the recent invitation extended to Saudi Arabia to join BRICS, the intergovernmental organisation consisting of Brazil, Russia, India, China, and South Africa.
Despite the global FDI landscape showing signs of fracturing, Latin America is experiencing historic levels of FDI. As a result, the partnership between Patria and PIF taps into the growing appeal of Latin American markets as geopolitical and inflationary safe havens.
As a popular and resilient asset with a clear and mature growth trajectory in terms of daily traffic use, Brazil’s toll road system is an attractive option for foreign direct investment (FDI) platforms looking for opportunities in Latin America’s largest country and most dynamic economy. Representing the main logistical arteries that connect both communities and businesses nationwide, toll roads and highways are a critical part of the transport matrix in Brazil.