Alexandre Rocha

alexandre.rocha@anba.com.br

Riyadh – Saudi Arabia’s Public Investment Fund (PIF) is planning to invest as much as USD 10 billion in Brazil. The announcement was made this Tuesday (29) by Brazil’s Foreign Minister Ernesto Araújo and Chief of Staff Onyx Lorenzoni, following a meeting between Jair Bolsonaro and Saudi crown prince Mohammed bin Salman in Riyadh.

“Both sides have expressed their support to the Public Investment Fund’s willingness to explore potential mutually beneficial investment opportunities worth as much as USD 10 billion, in partnership with the Republic of Brazil,” read a joint statement on the Brazil-Saudi Arabia Strategic Investments Partnership released this Tuesday evening (local time).

The PIF is Saudi Arabia’s sovereign fund. According to Araújo, the industries getting resources will be decided on “jointly.” “This is the result of our hard work in diplomacy, by the president, and this visit of ours. The relations we are building with Saudi Arabia and the entire Arab world is also the result of the trust Brazil is garnering abroad,” the Brazilian foreign minister said. “We were talking today with the president of Goldman & Sachs [John Waldrow], who was telling us that Brazil and Saudi Arabia today are surely the two most dynamic countries to invest in. in short, it’s a whole conjunction,” he said.

According to Lorenzoni, Brazil is the sixth country set to get funds from the PIF, after the United States, Japan, France, South Africa and Russia. “The volume of investments [earmarked for Brazil] is the same as in Russia, for instance, and double that of France,” he stressed.

He said a cooperation council will be appointed by both governments, with private sector involvement on both sides, to pick out the investment fields and schedule. “In two to three weeks’ time we should have this council up and running,” he said. The idea is to take advantage of the fact that in the next few years “there will be a very big number of offerings under the Investment Partnerships Program (IPP).” Lorenzoni believes the investment will take place within the next three years.

The Chief of Staff, who’s in charge of the IPP, discussed projects in oil and gas, seaports, airports, roads and railways. “We have, for instance, a keen interest in Ferrogrão, which is very likely to get built. It’s a very important railroad for Brazil. It will go from Mato Grosso to Pará, spanning about a thousand kilometers at an estimated cost of over USD 3 billion. It’s a project that will be built from scratch up to its final delivery,” he said.

On his way back from a dinner offered by Mohammed Bin Salman to participants in the Future Investment Initiative (FII), held in Riyadh and also known as “Davos in the Desert,” Bolsonaro said Saudi Arabians have been “first” in choosing investment options in the Brazil. “We have Ferrogrão, for instance. An outlet to the Pacific would also be welcome, but you can do a lot with USD 10 billion, and we need infrastructure in order to really get Brazil to develop,” he said. “The doors to Brazil are open. These are great investment options.”

The president remarked that dinner was attended by the king of Jordan, Abdullah II, the prime minister of India, Narendra Modi, and other authorities, plus United States president Donald Trump’s son-in-law Jared Kushner. Bolsonaro will sit on a panel in the IFF this Wednesday (30).

Lorenzoni underscored that Brazil’s ambassador to Riyadh, Marcelo Della Nina, was “instrumental” to the initiative.

Ernesto Araújo added that the PIF’s willingness to invest is “perhaps” the most consequential result of the president’s two-week tour of Asia and the Middle East, which has included Japan, China, the UAE, Qatar and Saudi Arabia.

“It will generate a dynamic for further investment,” he said. “All of these big funds are realizing that Brazil is unparalleled in terms of rates of return, of the quantity and quality of our investment portfolio, so I believe that [this initiative] will also create an emulation effect whereby many of the funds will look to invest in Brazil. Apart from being important in its own right, this is the seed of an entire international investment process,” he said.

BRF

This Tuesday, BRF – which owns brands Sadia and Perdigão – announced a project that will see USD 120 million invested in manufacturing facilities in Saudi Arabia. The country had restricted imports of processed food items from the company’s unit in Abu Dhabi, UAE. Lorenzoni said this is a thing of the past.

“This region can be a smart platform for Brazilian companies to tap into deals in markets that are super relevant,” the Chief of Staff said in reference to Africa and Asia. “They are very interested in having Brazilian companies here, to diversify their own economies,” he concluded.

Translated by Gabriel Pomerancblum

José Dias/PR

José Dias/PR