At an Extraordinary Deliberative Session on 11/22/2017, the Federal Senate approved Provisional Measure 786/17 (“Provisional Measure” or “MP”), in the form of Conversion Bill PLV 32 of 2017 (“PLV 32”), which provides for the Federal Government’s participation in a fund to support the structuring and development of concession and public-private partnership projects and the mandatory transfer of funds to States, the Federal District and Municipalities for carrying out actions under the Growth Acceleration Program (PAC), authorizing the Executive Branch to create the Brazilian Agency for the Management of Guarantee Funds and Guarantees S.A. (ABGF). PLV 32 is therefore currently awaiting Presidential approval.
The approval of the Provisional Measure reinforces the Government’s intention to maintain its efforts to develop and finance new infrastructure projects. This is because, under PLV 32, the Federal Government remains authorized to participate in a fund whose sole purpose is to finance professional technical services to support the structuring and development of concession and PPP projects of the Federal Government, States, Federal District and Municipalities, up to a limit of BRL 180 million.
In order to enable and encourage the structuring of projects in the country’s most underserved regions, PLV 32 (keeping the text of the Provisional Measure) provides that up to 40% of the BRL 180 million mentioned above will preferably be used for projects in the North, Northeast and Center-West regions.
The fund, in addition to being managed and represented by a financial institution directly or indirectly controlled by the Federal Government, will not have its own legal personality, will be private in legal nature and will have assets segregated from those of the unitholders and the managing institution.
The fund’s assets will consist of:
I – paid-in units;
II – donations from foreign states and international and multilateral organizations;
III – reimbursements of amounts spent by the managing agent in contracting the services;
IV – income from the financial investment of its funds; and
V – proceeds from the sale of assets and rights, or from publications, technical material, data and information.
The technical studies will be contracted according to the criteria established by the managing institution and carried out as provided in Law 13,303/2016, which provides for the legal statute of public companies, mixed-capital companies and their subsidiaries.
Our team is fully available to provide further information on the subject at mail@gnetoadv.com.br.
