Cities, transportation and energy transition are the main investment areas of the New PAC

On August 11, Brazil’s Federal Government launched the New Growth Acceleration Program (PAC), with an expected investment value of BRL1.7 trillion. Most of these investments are expected to be made by 2026 (BRL1.4 trillion).

The investments planned in the New PAC will come from the Federal Budget (OGU), to the value of BRL 371 billion; by state-owned companies, to the value of BRL 343 billion; by financing, to the value of BRL 362 billion; and by the private sector, to the value of BRL 612 billion. The expectation, therefore, is that the private sector will participate with more than a third of the total investments planned, mostly through concessions and public-private partnerships (PPPs).

The program was established by Decree No. 11.632, dated August 11, 2023, with the objectives of seeking the expansion and qualification of infrastructure for the country’s competitiveness and growth, with fiscal responsibility; integrating investment in infrastructure into the processes of neo-industrialization and ecological transition; and fostering the generation of employment and income.

The New PAC is organized into nine lines of investment:

1. Efficient and sustainable transportation (BRL349.1 billion);

2. Inclusive social infrastructure (BRL 2.4 billion);

3. Sustainable and resilient cities (BRL 609.7 billion);

4. Water for all (BRL 30.1 billion);

5. Digital inclusion and connectivity (BRL 27.9 billion);

6. Energy transition and security (BRL 540.3 billion);

7. Innovation for the defense industry (BRL 52.8 billion);

8. Education, science and technology (BRL 45 billion);

9. Health (BRL 30.5 billion).

The states that will receive the most investment are, respectively, Rio de Janeiro, São Paulo, Minas Gerais, Sergipe and Bahia.

Below are more details about some of the investments that are part of the three main axes of the New PAC:

Sustainable and resilient cities

The sustainable and resilient cities axe includes investments in housing, housing finance, urban mobility, slum urbanization, solid waste management, disaster prevention and sewage disposal.

In the sustainable urban mobility segment, priority has been given to high and medium capacity transport systems, such as urban trains, subways, BRT (Bus Rapid Transit), LRV (Light Rail Vehicle) and bus corridors. The main goal is to shorten commuting times in metropolitan areas and improve citizens quality of life. The urban mobility sub-axis will include public and private investment, with estimated resources of around BRL 48.7 billion. This sub-area encompasses the resumption and completion of urban mobility projects, including initiatives such as the BRT Eixo Sul in Brasília (DF), the Corredor Centenário in Belém (PA) and the BRT Norte Sul 1 and 2 in Goiânia (GO).

Investments in solid waste management aim to optimize public health and quality of life, while at the same time promoting environmental sustainability. For this sub-area, an allocation of BRL 1.8 billion is planned, with the aim of resuming and completing works and carrying out solid waste concession studies in various states, such as Bahia, Minas Gerais, Pernambuco and Rio Grande do Sul. Examples include the Triângulo Mineiro Concessions (MG), the Agreste Consortium (PE) and the CISGA Consortium (RS).

In addition, the New PAC estimates investments of BRL 26.8 billion in the sanitation area, including new works and studies for concessions. Notable projects under the program include basic sanitation concession studies in the States of Sergipe, Porto Alegre and Paraíba.

Efficient and sustainable transportation

The New PAC resumes investments in logistics, covering highways, railroads, waterways, ports and airports, with the aim of mitigating logistics bottlenecks and improving the interconnection of the national transportation network, resulting in greater sustainability and efficiency. The actions planned for this axis rely on public and private resources.

As far as highways are concerned, major works will be carried out to restore the existing infrastructure, maintenance, upgrading, duplication, implementation of new stretches and capacity expansion, with investments expected to amount to BRL 185.8 billion. The program also provides for new concessions on several important logistics routes, including BR-381 from Belo Horizonte (MG) to Governador Valadares (MG), BR-040 from Cristalina(GO) to Belo Horizonte (MG) and BR-262 from Uberaba (MG) to Betim (MG).

In the field of railroads, planned investments total BRL 94.2 billion. Among the planned projects are the construction of Transnordestina railroad on the Salgueiro-Suape (PE) stretch, the implementation of the São Paulo-Campinas (SP) intercity passenger train and studies for new concessions, such as EF-170, known as Ferrogrão, a railway line that will starts in Sinop (MT) and end at the port of Miritituba (PA).

Transition and energy security

The New PAC is also committed to promoting energy transition and security, based on the following sub-areas: (1) energy generation; (2) light for all; (3) energy transmission; (4) energy efficiency; (5) oil and gas; (6) mineral research; (7) low carbon fuels. The investment forecast totals a significant BRL 540.3 billion. The technical, economic, and socio-environmental feasibility study for the Angra 3 nuclear power plant, work on the Bragança-Extrema (SP/MG) gas pipeline and studies on green hydrogen projects are all planned under this heading.

For more information about the New PAC, visit its official website.

Rolim Goulart Cardoso Lawyers is available to provide clarifications regarding infrastructure projects and to answer inquiries about the PAC.

Related professionals: Luis Gustavo Miranda, Paulo Teixeira Fernandes, and Ana Luísa Diniz Silva.