President of Brazil unveils $350bn 'growth acceleration' plan

growth acceleration

The "growth acceleration" plan launched by Brazil on Friday foresees 1.7 trillion reais (US$347.5 billion) in investments that will rely increasingly on public-private partnerships, while driving a new ecological transition plan, the government said in a statement carried by Reuters.

The programme, known as PAC, revisits an initiative that President Luiz Inacio Lula da Silva first introduced in 2007 during his earlier term in office to raise investments in energy, logistics, and urban and social infrastructure.

It was later expanded under his successor, former President Dilma Rousseff, but failed to bring fundamental advances in infrastructure, Reuters reported.

Lula's government says the plan will follow a path marked by stronger partnerships between the public and private sectors, with more than 1.3 trillion reais estimated to be disbursed by 2026.

"This PAC is different from the other ones. The state will stimulate PPPs," Lula's Chief of Staff Rui Costa said at the launch of the programme in Rio de Janeiro. He added there would be "fiscal and environmental responsibility" while looking after social needs.

"It's time we buried the idea that social responsibility is fiscal irresponsibility," he said.

According to the government, 371 billion reais - or 22 percent of the total - are set to be invested by the federal government, while state-owned firms such as oil giant Petrobras (PETR4.SA) would inject 343 billion.

The private sector is seen investing a total 612 billion reais. The government did not immediately detail the fiscal impact of the initiative, or give a specific time frame for the plan.

Even though the plan includes several projects in the oil and gas sector led by Petrobras, and investment in the pre-salt offshore oilfields, Lula's team emphasised its environmental goals and announced an “ecological transition plan”, the Reuters article further explained.

Finance Minister Fernando Haddad said the ecological plan would be focused on establishing a regulated carbon-credit market, issuing sustainable sovereign bonds and reformulating a climate fund that aims to bring down emissions.