Economic team gave a presentation in the USA to around 60 investors; minister conditioned issuance to the Treasury
The Minister of Finance, Fernando Haddad, said this Sunday (September 17, 2023) that the economic team made a round of presentations to around 60 foreign investors about possibilities for investing resources involving sustainability. According to him, the Brazilian government is prepared to launch green bonds.
Haddad, however, conditioned the issuance on the National Treasury. “We are in a period of silence. After you do the road show [apresentação antes de emitir os títulos], cannot advertise. Unless it is to effectively launch the titles. […] It is up to the Treasury to decide whether to launch”, he declared.
Haddad spoke about the subject in an interview with journalists in New York (United States), where he is attending a series of meetings with businesspeople, in addition to accompanying President Luiz Inácio Lula da Silva (PT) at the UN (United Nations).
Brazil hopes to attract US$1 billion in the first issuance of sustainable public bonds. “The most important thing is to contact the final demand, which is who will buy sustainable bonds”said the minister.
According to him, there are “Brazilian potential to double clean energy within 5 years”.
Fernando Haddad also stated that the launch of sustainable bonds will serve to attract investments in industrial production: “We will try to unite the energy transition with the ecological transition through a process of neo-industrialization.”
Responsible for coordinating the Ecological Transition Plan on Finance, special advisor Rafael Dubeux was in charge of 36 meetings to provide information on the topic to international investors. He will assume the role of deputy executive secretary of the ministry, but there is no set date.
According to Dubeux, it is necessary to wait for the “suitable market moment” to issue sustainable bonds. Haddad’s assistant said that investors welcomed the proposal.
“The signage [dos investidores] it was very positive after the road show”, he stated. Rafael Dubeux said, however, that “there was no agreement reached in the conversations, there was no definition of values”.
In conversations with investors, Dubeux presented Brazil’s macroeconomic indicators and measures taken to unlock economic growth and attract investment, such as the approval of the fiscal framework and tax reform, currently being processed in the Senate.
Haddad also spoke about the government’s expectation of obtaining revenue from the resumption of the Carf (Administrative Council of Tax Appeals) casting vote. In practice, the mechanism gives the Brazilian government an advantage in the event of a tie in the majority of trials.
“It is a resumption of the Brazilian State’s leading role in relation to the sensitive issue. There is more than R$1 trillion there, which was blocked. In my opinion, Congress corrected a serious problem”these.
The minister stated that there are 126 companies that account for 50% of administrative litigation, with values between R$500 billion and R$600 billion. It is expected that around 80% of trials will be carried out by the end of 2024.
“If we are diligent and judge between R$500 billion and R$800 billion, which is the target given to Carf by the end of next year, our estimate contained in the Budget becomes a concrete possibility”these.
According to him, this is because “10% of judgments end up going to the national Treasury either through payment from the taxpayer or because they file a lawsuit and make a deposit to appeal to the judiciary, which ends up generating primary revenue”.
A significant part of this contingent of processes is linked to Petrobras. According to Haddad, the oil company “You will get into the same routine as the others. There is no differentiated work”.
On August 31, Luiz Inácio Lula da Silva’s (PT) economic team sent the 2024 budget project to Congress with revenues equal to expenses, resulting in a primary result equivalent to 0.0% of GDP (Gross Domestic Product).
The projection complies with the determination of the fiscal framework approved by the National Congress in August, which determines to bring next year’s fiscal deficit to zero in relation to GDP. To achieve this result, there is an estimate of R$ 168.52 billion in new recipes. Here is the full Budget proposal for 2024 (PDF – 24 MB) of the document.