DNA Capital buys stake in Ânima’s medical schools division

DNA

Health-focused fund DNA Capital is investing R$1 billion in the medical school division of Ânima. With the injection, the fund now holds 25% of Inspirali, an arm of the education company that is already the second largest in the medical courses market – the most profitable undergraduate course in higher education in Brazil.

The funds are earmarked for organic expansion, acquisitions and a stronger bet on technology. With the outbreak of the pandemic and the imminent arrival of fifth-generation mobile network in Brazil, there is a growing demand for digital solutions for telemedicine and remote surgeries. In addition, classes are increasingly including simulations of medical procedures performed using technology. DNA Capital, the parent company of Dasa and Viveo, has strong expertise in healthcare, having already made about 20 investments in healthcare startups.

The R$1 billion injection was closed for this purpose, but will also help to reduce Ânima’s leverage ratio, now at the limit of 4.1 times EBITDA – a level much questioned by investors because it reduces the company’s ability to expand. The group has this liability due to the acquisition of Laureate Brasil for R$4.4 billion. “Our leverage drops to 2.8 times EBITDA. With this injection, we will unlock growth. We will be able to take advantage of the opportunities that arise in the market,” said André Tavares, Ânima’s chief financial officer. “Our interest is very broad, it can be an edtech [an education technology firm] with a health link, medical schools, or expansion of units. We also want to grow our lifelong learning field, which is still small,” added Guilherme Soárez, who heads Ânima Educação’s continuing education division.

Ânima’s chairman Daniel Castanho considers that technology comes to help in the formation of students and doctors so that they have a more humanized look. Humanized medical care is seen as one of the main trends in health, effectively contributing to a better rehabilitation of the patient. “In health, the focus now is on health, not disease. In education, a diploma alone is no good, you need to have continuous learning, some are entrepreneurs. In both sectors, what counts is the purpose, the humanized look makes the difference. That’s why this business combination is so rich,” Mr. Castanho said.

The transaction between Ânima and DNA materialized seven months after another similar deal. In April, Softbank invested R$820 million in Afya, Brazil’s largest medical schools company, which operates exclusively in this market.

Source: Valor international

https://valorinternational.globo.com/

Itaú BBA says 2021 has been “spectacular year”

Conheça o Itaú BBA | Itaú BBA

Itaú BBA CEO Flávio Souza has started to notice a slowdown in some activities due to inflation and the rise in interest rates. In spite of that, he says that 2021 has been a “spectacular year” for the bank and sees opportunities for the next one, despite the more difficult context.

“It is natural that there is an accommodation. There is a reduction in intensity in some activities,” the executive told Valor in his first interview since taking over, in February. “The year ends with a more challenging scenario, but we continue investing.”

Focused on medium-sized and large companies, Itaú BBA is expected to end December with around R$400 billion in its credit portfolio. The volume represents an annual growth of 12% to 13% – half the pace reported in 2020, when everyone “filled up the tank” to face the uncertainties of the pandemic, but a “very satisfactory” level, according to the executive.

In addition to a still heated credit market, the capital market also came back strongly this year. In stock offerings alone, Brazilian companies have raised R$135 billion so far. Of the 76 transactions carried out, Itaú BBA has participated in 59, raising R$21 billion. “We are in high-stress weeks, but the year is spectacular.” He believes that companies may raise up to R$150 billion this year.

Last year, companies raised R$127 billions through 56 IPOs and secondary offerings.

For 2022, he avoids making estimates, since election years are historically weaker. The horizon has become cloudier in recent days with the news about the omicron variant of the coronavirus, something that, according to Mr. Souza, “is concerning and strengthen the importance of vaccination worldwide.” Still, he sees companies raising between R$80 billion and R$100 billion in the capital market.

This year Itaú BBA started to structure the ESG business area, which refers to environmental, social and governance practices. An extensive questionnaire was sent to 1,300 companies to map their engagement. “It is still not possible to say whether companies are really prepared [for the ESG agenda]. What I perceive as being different is that the issue has entered the company’s strategy for good,” says Mr. Souza.

This area of the bank started with four people and now has eleven – and it is likely to expand further. According to him, a good part of the companies will make it tangible, from the perspective of capital market business.

Another business area of the bank that has advanced is agribusiness. When it was structured in 2018, BBA had 30 executives assigned to the sector. “By 2021, we have 300 people in the operation.” The sector’s credit portfolio grew 60% this year.

Despite the slower recovery and the crisis caused by the pandemic, Mr. Souza says he does not see companies with financial health at strong risk at the moment, compared to the years 2015 and 2016, marked by recession.

“The performance of the loan portfolio is very healthy. For now, we see good portfolio quality. It is clear that the interest rate and high inflation environment impacts disposable income, and we may see less consumption affected by income.”

According to him, this effect, if it indeed happens, will start to impact individuals and, further ahead, companies. “We went from an exchange rate of R$3.50 to R$5.60 [to the dollar]. But we realize that companies are doing their homework.”

With the health crisis, which has strongly affected companies since last year, Mr. Souza believes that mergers and acquisitions operations (M&A) should remain strong in the coming months.

So far, 251 operations have been carried out, totaling R$ 408 billion. In comparison with the whole of last year, the transactions in volume grew 38.6% (in 2020 there were 181 operations) and more than doubled in value (R$194 billion last year). Leader also in this segment, Itaú BBA advised 42 operations.

The Itaú BBA executive sees the M&A market heated but says that the activity is also sensitive to the elections, just like the capital market. Mr. Souza thinks it is still too early to risk a guess about who might be elected and sees the scenario still polarized between President Jair Bolsonaro and former President Luiz Inácio Lula da Silva. For him, there is room for a third candidate, but he thinks it’s still too early to pin down a name with chances of becoming more competitive.

The ideal, for him, would be the commitment to approve the most impacting overhaul agendas, such as the administrative and tax ones. “The reforms will set the tone for the low interest rate scenario. We need predictability.”

Mr. Souza, who has been leading BBA for almost a year, has already begun to intensify his activities in person, but has respected the executives who prefer to work remotely. For him, in investment banking, face-to-face contact is very important for the client.

Source: Valor international

https://valorinternational.globo.com/

Crisis creates millions of poor in Brazil

11 Facts About Global Poverty | DoSomething.org

At 9 a.m., Marina Timóteo da Silva, 20, takes her youngest son in her arms and her oldest daughter by the hand down the narrow alleys of Grota, in Paraisópolis, São Paulo, to the lunch line at the NGO G10 das Favelas, in the lower part of the slum.

She gets two portions for lunch and dinner, then wait to see if she can get another one for breakfast the next day. She separated from her husband four months ago, and now provides for her 5-year-old daughter and 1-year-old son with donated food and odd jobs as a hairdresser in the neighborhood. Ms. Silva finds herself with no way out. She is very concerned about the rent, which will be raised to R$400 from R$300.

Ms. Silva is part of the more than 4 million new poor that the pandemic left as a legacy in Brazil. Since the Covid-19 shock, the country has been experiencing an explosion of poverty and prospects are not rosy. This acceleration is visible in large cities, including São Paulo, where there is an increase in entire families living on the streets.

The proportion of poor people – who have a monthly per capita income of up to R$261 – was 10.97% (23.1 million people) in 2019. In August 2020, it went to 4.63% (9.8 million people), the best since official records began, due to the adoption of full emergency aid, according to FGV Social, the Center for Social Policy at the Fundação Getulio Vagas, based on microdata from the Continuous National Household Sample Survey (PNAD Contínua) and PNAD Covid.

In the first quarter of 2021, excluding the emergency aid, but returning cash-transfer program Bolsa Família, poverty is multiplied by 3.5 and reaches 16.1% of the population. That’s 34.3 million people below the poverty line, 24.5 million more than in the previous six months.

With the adoption of the new aid on a reduced scale and limited duration from April this year, the proportion of people below the poverty line reaches 12.98%, 4.6 million more than before the pandemic.

The scenario ahead is uncertain, says FGV Social coordinator Marcelo Neri, due to the doubts surrounding Auxílio Brasil, which will replace Bolsa Família. “If the original value of Bolsa Família were maintained, another 6.8 million would be in poverty, totaling 11.4 million more people than before Covid-19,” said Mr. Neri. “But it should not reach this total, as the new aid will be higher. We just don’t know how much higher it will be and how long it will last.”

Many beneficiaries of Bolsa Família and the emergency aid do not know if they will be covered by Auxílio Brasil – the discussion on poverty lines, inflation correction and the extension of payments is ongoing.

This is the case of Ms. Silva, from Paraisópolis. Before the pandemic, the woman, who was born in Bahia and has been living in São Paulo for 15 years, worked serving meals at the restaurant Cidão do Bar, near the Alto Morumbi slums. She earned R$900 a month by March 2020, when Cido, the owner, had to sell the business. Ms. Silva even received R$600 through the emergency aid last year. Since then, she gets by with the R$150 she eventually gets as a hairdresser, the meals she takes from Monday to Saturday, and the help from her ex-husband, who last week gave her R$100 to buy fruit and diapers.

She lives in a small house in Grota, one of the areas where the inhabitants live crowded together in Paraisópolis, in the middle of alleys with garbage. Downstairs is a single mattress where she sleeps with her children João Miguel and Ana Vitória, next to the sink with fruit, three dishes and detergent, and the bathroom. Upstairs, the cold floor with puddles that formed the night before because of the leaks.

“With what I earn today I can’t buy gas bottles and cook food. If I received the aid, I would be able to buy bottles, and I would get a stove from a junkyard,” she says. “But I don’t know if I’ll get it, and I have to see how I’ll pay the next rent. I am living off collecting cans.”

Twenty kilometers away, in Heliópolis, Renata Cristine do Nascimento, 31, lives a similar situation. “I was born and grew up here. I have never been through this. I’ve been in trouble, but I always had a cart to pull, recycling, cans and cardboard to pick up, vegetable to sell. But not now,” she says. “We want to work and we can’t. And there are many families like us out there, in difficult situation, sharing milk, rice, whatever they have.”

Ms. Nascimento lives with her son Miguel, age 5, and daughter Janaína, age 12, in a bedroom with a kitchen inside an old house that was divided into three, in an area known as Paquistão (Portuguese for Pakistan), near the Heliópolis Hospital. Her house is the only one where ventilation can enter through the door and window – the other two neighbors only have a door. The rent for the room that has a double bed where she sleeps with her son, a single bed for her daughter, a TV, a stove, a refrigerator and a bathroom with shower costs R$400 and is two months overdue.

She says that everything got worse after she got Covid-19 in January this year. Until then, she was receiving R$171 from Bolsa Família and a salary of R$1,200 as an employee at a supermarket in Mooca. She had three strokes, was hospitalized for 15 days, had physical therapy and partly lost vision in her left eye.

She received R$1,200 in emergency aid in April 2020, but she doesn’t know how much she will receive in the future. Today she receives Bolsa Família, plus R$380 she gets through odd jobs as a kitchen assistant in a bar and at Clube Juventus every two weeks. Among the fixed expenses are rent (R$400), internet (R$50) and school transportation (R$120). Eventually Ms. Nascimento gets odd jobs – she does manicure and pedicure services for R$25 and cleans houses for R$100.

“Sometimes I get a donation, a basic food basket, or I use my credit card. Once I owed three months’ rent and a friend came to help me,” she said. “But I can’t get a job anymore. I’ve already had a lot of interviews to work as a kitchen assistant and caterer, but when I explain that I need to have exams every Monday and Thursday because of the sequelae of Covid, they don’t accept.”

Ms. Nascimento complains that the government has forgotten who lives in the favelas and that, even if the new allowance is higher than R$400, it will not be enough. “We don’t want money, we want work. I don’t want the government to give me R$400, I want to work,” she said. “I want to be able to walk around, go out with the kids, take them to the park. I just want to have a job so that if my son asks for bread, I can pay for it. Because today I don’t have a cent.”

All the partial evidence suggests that there has been a very significant and sad increase in poverty in Brazil, said Pedro Herculano Guimarães Ferreira de Souza, with the Applied Economics Research Institute (IPEA). “What triggered this was the pandemic, but the problem is that all the evils it brought came at a very bad time for Brazil,” he said. “The recovery that took place between 2016 and 2019 benefited the richest half of the population, while poverty rates remained very high. It was a lost decade because after the recession, poverty and inequality increased and never fell to their previous level.”

Mr. Souza says the pandemic caught Brazil at a bad time, with Bolsa Família out of date and without adjustment, and a lower income among the poorest people than before the recession. “It was a very bad starting point. In 2020, we had the emergency aid, but it was temporary and expired. Now we are seeing the real impact of the crisis, and the damage has become clear.”

Today, the big problem with Auxílio Brasil is uncertainty, he said. “Any program that manages to transfer more money to poor families is welcome, because R$50 or R$100 makes a big difference,” he says. “But we don’t know the format of the program, the values, whether it will be permanent or temporary, how the readjustment of the poverty lines will be.”

Data from the Ministry of Citizenship show that nearly 68.26 million people were eligible to receive emergency aid in 2020, a number that dropped to 56.84 million eligible to receive the extension of emergency aid, and to 39.37 million who received the aid in 2021. Of these, just over 10 million are Bolsa Família beneficiaries and should continue to receive the payments, now under the name Auxílio Brasil. But the fate of more than 29 million people who received emergency aid this year but do not receive Bolsa Família is an unknown.

“What will happen is that these people will be left unprotected”, said economist Marcelo Medeiros, a professor at Columbia University. “Even if that’s the case, even including everyone in this new Bolsa Família takes time and depends on government engagement. And the incentives that the government has for this are deeply moved by the elections.”

Mr. Medeiros predicts that the increase in inequality in recent years should persist in the medium term. “The truth is that poverty in Brazil grew as it always does after the recession. What the pandemic has done is to amplify that by introducing new causes. But Covid-19 wasn’t the only reason,” he said.

According to the economist, after the 2015-2016 recession, no clear measures were taken to recover the income of the poorest. “It was just when the government should have brutally expanded Bolsa Família, but it didn’t. The social safety net is there for that: to keep people from falling into poverty in a crisis,” he argues. Mr. Monteiro says that from 2016 until now there have been few moments of recovery focused on the richest.

In a “normal” country, social spending exists to compensate, reduce and mitigate social problems arising from economic crises, like the one that Brazil has been experiencing since the end of 2014, said Celia Kerstenetzky, from the Institute of Economics at the Federal University of Rio de January (UFRJ).

“The health crisis has aggravated this scenario, affecting employment and income. But it also showed the potential of social policy to compensate for problems at a critical situation, as happened with emergency aid, and it demonstrated what many were already saying: that social policy has positive impacts on the economy and development. In the absence of this transfer of income, the fall in GDP in 2020 would have been much greater than it was,” she said.

International experience, she says, shows that social policy works well when institutionalized in the form of regular, systematic programs and policies, functioning as “automatic stabilizers” that respond immediately to social needs.

But in the case of Brazil, she said, we react to crises by deinstitutionalizing previous public responses, subtracting the capacity to respond to problems. “The most perverse symbol of this is the extermination of Bolsa Família and its replacement by something that nobody knows what it is, but which has a date to end and a political and electoral objective to fulfill,” she said.

Mr. Medeiros argues that Brazil is once again in the post-recession environment that marked the Temer administratrion. “We need to make the economy recover and there is no clear measure to foster economic recovery among the poorest,” he warned.

If the GDP grows around 4.8% this year, as projections point out, it does not mean growth of this magnitude for everyone. “When we say that the economy will grow, we are talking about the richest 5%, who keep half of everything,” he said.

The idea of economic recovery has been aborted, with forecasts getting worse and a scenario of stagflation, which is already a reality for the poor, says Mr. Neri. “The unemployment rate and inflation are higher for the poorest half of the population. And they’ll both go up before they go down,” he says. “The scenario is worrying and adds to the electoral cycle that is approaching, which tends to throw more fuel on all these uncertainties.”

Source: Valor international

https://valorinternational.globo.com/

Brazil leads Engie’s green hydrogen projects

What potential is there to create a 'green hydrogen hub' in Hamburg?

Brazil will play a relevant role in the strategy of French holding Engie to reach the goal of 4 gigawatts (GW) of global green hydrogen production capacity by 2030. According to the executive vice president of green hydrogen business development of the group, Raphael Barreau, the country has strong potential to attract projects due to the abundance of water and the good price of energy generated by renewable sources.

Electric energy is used in electrolysis, the process that produces hydrogen. In the case of green hydrogen, the electricity used comes from renewable sources. Mr. Barreau, recently selected to occupy the company’s division for the segment, will be based in Brazil.

He points out that the complementarity between wind, solar and hydroelectric generation in the country guarantees a constant supply of clean energy, which helps to lower the cost of the electrolysis units. “Many companies are looking at the production of green hydrogen for export in Brazil. They are realizing that production here will be much cheaper than in other countries,” he says.

He indicates, however, that Brazil still needs to overcome challenges to remain attractive to projects, such as expanding the transmission network connection, in order to guarantee access for other regions to renewable energy produced in the Northeast region. The executive also points out the importance of improving regulation so that hydrogen can be inserted into natural gas transport and distribution networks. Another aspect in which the country needs to advance, according to him, is the regulation for the generation of offshore wind energy, which can help in the development of hydrogen.

He points out that, for the country to be competitive in hydrogen production for export, it would also be important to reduce taxes. “If we could reduce the tax burden on the production of green hydrogen, whether on taxes on importing materials, or other taxes, hydrogen would be more competitive,” he says.

The French company operates in Brazil through Engie Brasil Energia (EBE), with electricity generation and transmission activities, as well as natural gas transport. EBE is the largest private generator in the country, with 10.79 GW of installed capacity, of which 90% are from renewable sources.

Mr. Barreau emphasizes that the group’s participation in the natural gas segment should also help in the development of the hydrogen business, as the competences for transport, storage and distribution will be similar. “Hydrogen should play a relevant role in the group’s portfolio as natural gas decreases. We think that somehow, in the long run, natural gas must be replaced by hydrogen,” he explains.

As a carbon neutral fuel, analysts have pointed to green hydrogen as one of the big bets for a low-carbon economy. The solution has strong synergies with the production of fertilizers such as ammonia. “The world has the objective of reaching carbon neutrality by 2050. In areas where we cannot use electricity, we will be able to use green gases, such as green hydrogen,” says Mr. Barreau.

According to the executive, there are already economically viable applications for green hydrogen, such as replacing diesel in mining trucks. There is also the possibility of reducing production costs, with technological improvements and efficiency gains in the electrolysis process, in addition to reducing the prices of renewable energy.

Mr. Barreau assesses, however, that to guarantee the financial viability of green hydrogen it is also necessary to advance in the pricing of carbon emissions. “The production of hydrogen with natural gas is cheaper, but this is the wrong view, it is not the same product. You have to compare the cost of fossil hydrogen with the cost of emissions,” he says.

Engie intends to reach 600 MW electrolysis capacity by 2025. To this end, the company is evaluating projects in different regions, especially in Australia, where it is developing a project that has received support from the local government. There are also ongoing initiatives in Chile and South Africa, in addition to countries in Europe and the Middle East.

In Brazil’s case, the company signed a letter of understanding with the government of Ceará to assess opportunities in the segment. In parallel, according to Mr. Barreau, there are conversations with other state governments in regions with great generation of clean energy.

The group is considering working in partnerships, but has the capital to develop projects on its own. “Our purpose is not to be a financial investor. We want to be the engine for the creation and development of projects. But there are many possible partnerships, such as a producer looking to integrate hydrogen and ammonia generation; an equipment supplier, or another energy producer,” he points out.

Source: Valor international

https://valorinternational.globo.com/

Brazil expands access to foreign companies in public procurements

What Is A Foreign Company As Per Companies Act, 2013? - InstaFiling

Brazil has expanded its offer for foreign companies to sell to more state-owned companies and more States, in the negotiations to join the Government Procurement Agreement (GPA) of the World Trade Organization (WTO).

In a secret document, to which Valor had access, Brazil increased from 6 to 11 the number of states that will allow foreign participation in public purchases of goods, services and works.

The initial offer included Minas Gerais, Paraná, Rio Grande do Sul, Brasília, Pará and Amazonas. Now, the Brazilian government has added the public markets of Santa Catarina, Goiás, Tocantins, Rio Grande do Norte, and Amapá.

The United States, the European Union, and Japan are still particularly interested in selling to the public sector in São Paulo and Rio de Janeiro (which remain outside the offer) because of the economic power of these states.

This time, Brazil is also offering access to the bids of two capitals: Porto Alegre and Manaus. Japan has already made a list of requests for liberalization of Brazilian cities, including São Carlos, a city in the countryside of São Paulo.

In the case of states, Brazil has established a threshold equivalent to $180,000 for the foreign seller. In construction, the contract must be for at least $6.9 million.

In purchases by the Executive, Judiciary and Legislative branches, Brazil has now included access for foreigners to purchases made by the Central Bank, Ministry of Labor, National Council of Justice, adding to all other ministries, federal courts, Chamber of Deputies and Senate, with some exceptions on products.

Despite pressure from partners, Brazil has for the time being maintained the exclusion of foreigners in the procurement of financial services by the public sector, in the acquisition of strategic health goods and supplies, and in several purchases of the President’s Office, the Foreign Office, the Ministry of Justice, and the Ministry of Defense.

For the Ministry of Foreign Affairs, better known as Itamaraty, a future joining of Brazil to the GPA “will promote the reduction of public spending and the improvement of the quality of government goods and services, as well as encourage Brazilian exports and foreign investment in the country”.

Itamaraty says that such joining is in line with recommendations by the Organization for Economic Cooperation and Development (OECD) on increasing transparency, fostering competition in the country, and tackling anti-competitive practices in public tenders.

The National Confederation of Industry (CNI) has reiterated that the impact on the Brazilian market should also be seen from the perspective of competitive isonomy. It considers that (although the GTA seeks to ensure that competition between domestic and foreign suppliers occurs on an isonomic basis), the WTO agreement will not eliminate costs that are currently incurred by domestic suppliers and that do not burden foreign suppliers, putting the latter at an advantage over domestic producers.

Negotiations will continue on the basis of Brazil joining the agreement. Brazilian companies, in turn, will have access to public purchases from the other 48 participating countries.

Source: Valor international

https://valorinternational.globo.com/

Acciona will bet on renewable power generation in Brazil

The Falling Cost of Renewable Energy - Ethiopian Gazette

Acciona will enter the renewable power generation market in Brazil. The Spanish company has just signed an agreement for a new wind project in Bahia, with a capacity of 850 megawatts, which is expected to require investments of at least €800 million.

The project includes two farms, Sento Sé I and II, which are still in the development and licensing stages. The construction is expected to start between the end of 2022 and the beginning of 2023. The main idea is to sell energy through long-term contracts with customers.

This should be just the company’s first step in the sector, but expansion is in the plans, said José Manuel Entrecanales, the company’s CEO, during a visit to Brazil last week. “The country has incomparable characteristics in the wind and photovoltaic sectors. There is a lot of demand for long-term power supply contracts,” he said.

The company already plans a second stage for the Sento Sé project and mulls building a solar power plant in an area contiguous to the wind farm that could use the same transmission infrastructure. The R$800 million project is expected to add 200 MW, according to preliminary figures.

“We also want to study new opportunities for joint development with Casa dos Ventos. There is a lot to do,” the executive said.

Acciona has been operating in Brazil for 20 years. Besides large construction projects, the company has operated Rodovia do Aço for ten years before selling the highway concession to KT2 in 2018. Since last year, the company is once more with a large contract: a line of São Paulo’s subway system. The concession initially held by Move São Paulo (formed by construction companies Odebrecht, UTC and Queiroz Galvão) was officially acquired at the end of 2020 by the Spanish group, which will build and operate the line.

The plan for the next decade is to substantially expand operations in Brazil, according to Entrecanales. “This country is as large as a continent. And there are growth drivers in all business fields in which Acciona operates: basic sanitation, water treatment, transportation, energy, urban mobility,” he said.

There is a plan for Brazil to surpass Europe in importance within the company in 10 years. In that case, Latin America’s largest economy would become one of the group’s three major operations alongside the United States and Australia. “Brazil has become an essential objective within our strategy.”

The scenario of political instability and fiscal and macroeconomic uncertainty does not reduce this interest, Mr. Entrecanales said. “Brazil, among the countries in which we operate, is the one with the most investment and development opportunities. It grows fast and has countless infrastructure needs, of all kinds. And there is a stable institutional organization. Yes, there is opposition and high political confrontation. But this is a characteristic of democracies. The country’s institutional solidity gives us a lot of confidence as investors,” he said.

Instability in the short run is important, but not decisive. “We are looking at the long term. In a 40-year project, the outlook of the first years plays a role, but it is not the most important thing.”

A concerning variable that can weigh on the decision of future investments is the legal security around the contract of Linha 6-Laranja, a subway line in the city of São Paulo, currently threatened by a ruling of the Federal Supreme Court (STF).

In August, an unexpected decision by Justice Dias Toffoli raised eyebrows in the market. He ruled that the transfer of concessions from one company to another would be unconstitutional and that any deal already carried out along these lines should be undone. That would directly impact the sale of the subway concession to Acciona. This is an old lawsuit, which had been stalled for years at the STF. Since the vote came out, there have already been signs that Justice Toffoli’s view can be reversed: Justice Gilmar Mendes requested more time to study the matter, and the rapporteur himself has signaled that he may change the ruling. But the case is still open.

“I cannot deny that this is a cause for concern. There is some risk, but the judicial events of the last few weeks, the economic rationale and the alternatives we have to solve this difficulty make me reasonably calm. Today we believe that it will be solved,” Mr. Entrecanales said.

Despite the ongoing imbroglio, Acciona is studying new projects. Among the targets are Trem Intercidades, a railroad between São Paulo and Campinas, sanitation auctions in several states, the concession of highway BR-381/262 between Minas Gerais and Espírito Santo and a real estate project in Salvador.

However, the executive highlighted the heavy financial commitments assumed in São Paulo’s subway and in the power project, and explained that it will be necessary to invest wisely.

The financing of Acciona’s projects underway has been done partially with cash from the parent company in Spain and with credit from the Brazilian Development Bank (BNDES) in Brazil. As for the new power project, the structure will depend on the clients and the long-term contracts signed – if it needs dollars, the financing will come from the parent company; if it needs reais, the company will take a loan in Brazil.

Acciona has operations in 60 countries and reported revenues of €6.4 billion in 2020.

Source: Valor international

https://valorinternational.globo.com/

Enel to invest €5bn in Brazil in 3 years

Enel sente impactos limitados de crise; lucro no 1º tri supera estimativas  | Exame

Italian power company Enel is expected to invest €5 billion euros in Brazil over the next three years, as part of the global plan announced on Wednesday, which foresees investments of €170 billion worldwide by 2030.

The group’s global investments over the decade represent an increase of 6% compared to that announced in 2020. Of the total, 43% will be directed to renewable power generation and 44% to network activities, with the remainder focused on technologies and energy services.

The main highlight of CEO Francesco Starace’s presentation to investors in Milan Wednesday was the announcement that the company will bring forward by ten years, to 2040, the goal to become carbon neutral.

Mr. Starace stressed that the next few years will be crucial for the world to achieve the decarbonization targets currently in force and that electrification will play a crucial role in this context. “The next decade will be the decade of electrification. It is a great challenge and a great opportunity for those who work in this market,” he said.

Enel’s decarbonization targets include direct and indirect carbon emissions. Thus, the company intends to exit all business related to the supply of gas by 2040, in addition to abandoning the coal-fired generation activity in 2027. “We have a goal of zero carbon and not just zero net carbon. The word ‘net’ is dangerous. Behind it there may be fictitious solutions. We will not have fictitious solutions here,” he said.

The company plans to increase threefold its global renewable capacity by 2030, reaching 154 gigawatts. Enel expects to start operating 21.2 GW of new renewable generation capacity, of which 26% will be in Latin America. The focus will be on solar and wind power, but there will be space for storage of energy and batteries in the portfolio.

Mr. Starace ruled out the possibility of investing in offshore wind generation, due to the higher costs and deadlines associated with the technology. On the other hand, he pointed out that Enel is interested in hydrogen. “We are going to invest in green hydrogen over the next three to four years to see if the technology is competitive,” he said.

Brazil is among the eight priority groups for Enel’s investments in the period, in which the company hopes to be able to double business margins by the end of the decade. The value of investments announced for Brazil over the next three years is in line with that put in place in recent years.

Mr. Starace stressed, however, that values can change, depending on the opportunities that the company finds. “The figures are purely indicative, not compromises. We will only invest if we have good returns,” he said.

Asked about the water crisis that Brazil faced in 2021 and that affected dam reservoirs, Mr. Starace said that local regulators managed the issue well and that he does not expect new problems in 2022.

According to Mr. Starace, the crisis ended up being a stimulus to expand investments in other renewable sources in the country. “The chances of the country suffering from it will fall again as it starts to count on more wind and solar power plants and that is what we intend to do,” he added.

He highlighted that the group wants to continue investing in large-scale renewable generation projects in Brazil aimed at the free market, in which large consumers choose energy suppliers. “The market is large and the appetite of industries and companies is high,” he explained.

Enel operates in Brazil in power generation, distribution, transmission, commercialization and services. The group has 18 million customers in the states of São Paulo, Ceará, Rio de Janeiro and Goiás. Altogether, the company operates more than 4.3 GW of generation, from wind, solar and hydroelectric sources.

Globally, at the end of the decade, the company wants to have 86 million customers in network services; with this, the volume of energy distributed by the group in the world should go to 570 terawatt hours in 2030 from 500 TWh estimated for 2021.

For Mr. Starace, high commodity prices, difficulties in accessing components and congestion at ports currently seen in the markets will not hinder Enel’s global growth trajectory.

The holding is interested in expanding investments in renewable generation in Colombia, Greece and Portugal. In Peru, the expectation is to focus mainly on distribution, with perspectives for energy storage projects.

In Mexico and Argentina, the company remains on hold. Mr. Starace explained that Enel has no plans to leave these countries, but stressed that the group hopes to have greater clarity on government decisions regarding the energy market before deciding on the next steps. Likewise, the executive said that Enel intends to remain listed on the Stock Exchange in Chile and dismissed rumors about a possible delisting.

Source: Valor international

https://valorinternational.globo.com/

Embraer calls for green slot in Congonhas airport

Congonhas presenteia viajantes com apresentação de jazz

Embraer will take a stance in the public consultation opened by the National Agency of Civil Aviation (ANAC) to establish new rules for the distribution of operating authorizations (slots) in congested airports. The world’s leading regional jet planemaker will defend that sustainability criteria, such as reduction of carbon emissions and aircraft noise, are taken into account in the process. Today, the only terminal that would fit the congested airport criterion to be modeled (called level 4) is the Congonhas terminal, in São Paulo.

The company also believes that this revision of the rules must include mechanisms that encourage the opening of new regional routes, reversing the trajectory of concentration of destinations seen in the last two decades. Across the country, according to Embraer, regional aviation served 130 cities in the early 2000s. Today, there are just over 100 locations — in Congonhas, the number of routes was reduced to 36 from 38.

“They could be green, sustainable slots that encourage regional aviation,” said Rodrigo Silva e Souza, head of market intelligence for commercial aviation at Embraer. The current rules, based on competition, aircraft size and operation, encourage the use of larger planes, with a reflection on the concentration of routes to the most popular destinations.

According to Mr. Souza, the current rules are also outdated in relation to what is seen in other key airports – London City Airport, for instance, has imposed strict restrictions on noise emissions. In Congonhas, 41 slots that belonged to bankrupt Avianca will be redistributed, in addition to additional authorizations foreseen with the privatization of the terminal.

Discussions about the new coordination rule is expected to be intense. Under the terms proposed by Embraer, it would tend to favor a certain type of aircraft — the Brazilian company’s E-Jets E2 or Boeing’s 737 Max, for example — and airlines that operate these models, such as Azul Linhas Aéreas. Embraer’s E-Jets E2 are considered the most efficient and sustainable narrow-body commercial jets in the world, and Azul was the first company to receive the E195-E2 in 2019.

Thiago Nykiel, CEO and founding partner of the consultancy specialized in civil aviation Infraway Engenharia, said that it is inherent to the industry to seek increasingly higher levels of efficiency, resulting in more sustainable operations. Therefore, there would be no need for a specific rule. “A regulatory measure of this nature [which associates efficiency and slot distribution] can impose additional costs on the industry and even create barriers to entry for new players,” he says.

For Mr. Nykiel, the objective criterion to be considered in slot coordination is system efficiency. “This does not prevent us from having a sustainable agenda. But, first, it is necessary to coordinate with the entire industry,” he said.

The discussion tends to add spice to the already fierce competition for space in Congonhas. The consultation runs until mid-December. Today, Latam has a historic right to operate in the winter season (which began in October) with 236.2 slots, or 43.99%. The company is followed by Gol, with 234.2 slots, or 43.61%. Azul has 43 slots, and Itapemirim, two.

However, due to the pandemic, Gol and Latam temporarily conceded some of their slots, which ended with Itapemirim and Total, two newcomers to the terminal. Itapemirim won Anac’s endorsement for ten daily slots as of November 3, increasing to 14 slots in December. Total will have 12 starting on January 29.

Among the points of the proposal under debate is a rule for the distribution of slots with a maximum market share limit of 40% per company. According to the rule to be studied, Gol and Latam would be left out of new divisions for having already surpassed the level, but they would not lose what is above the limit.

What is closely monitored, however, is the expansion of the terminal’s capacity – with more slots, the amount in these companies’ hands would be diluted and, thus, they could receive more.

In today’s scenario, however, Azul, Itapemirim and Total should benefit more in the distribution of Avianca slots, as they are new entrants. The preliminary division, in 2019, gave 12 slots to MAP, 14 to Passaredo (the two are Voepass) and 15 to Azul. TwoFlex, bought by Azul in 2020, also won 14 slots in the secondary runway at the time.

The competition is such that it led Gol to make an offer to buy MAP and, with that, take all the slots that are currently in Voepass’s hand (24). There is a lot of challenge ahead, however. The first is that Voepass lost four slots in the so-called winter season for not complying with the rules for using slots in 2019.

According to sources familiar with the deal, Gol theoretically has not bought MAP yet. The announcement was made, but through a conditioning operation, that is, the number of slots agreed upon must exist for the deal to take place. How many slots will actually fall under Voepass’s power is still unclear, as there are at least two entrants (Itapemirim and Total) that were not in the scene when the first deal was made.

In a note, ANAC said it expects to publish rules for new slots in the first half of 2022.

Source: Valor international

https://valorinternational.globo.com/

Estrella Galicia chooses Brazil for first factory abroad

Porta copos Estrella Galicia no Elo7 | ArteMáGika (62F010)

The Spanish beer brand Estrella Galicia, sold in Brazil since 2009, has chosen the city of Araraquara, 300 km north of São Paulo, to build its first factory outside Spain. With an expected investment of R$2 billion, the goal is to have 100% of its portfolio produced in the country as of 2023.

The investment by the Hijos de Rivera group, a centennial family-owned brewery based in La Coruña, is strategic to increase its share not only in the domestic, but also in the global market. Brazil, the third-largest beer consumer in the world, is a market that, after setbacks, is once again witnessing an increase in volumes. In the premium segment, in which the brand operates, the country is proving to be an important avenue of growth for companies in the sector. It already represents about 20% of beer sales in the country. The company sells two brands in Brazil, Estrella Galicia and 1906.

“It is not only the first plant outside Spain. It is the only one,” says Fábio Rodrigues, CEO for Latin America. “We have always seen Brazil as a strategic market, and since we arrived we knew we would have to set up an industrial unit in the country. So, about five years ago we started planning.” The company employs 1,500 people, including the Brazilian operation. With the new plant in Araraquara, the projection is to create another 400 jobs.

Currently, the company produces in Brazil, in a rented factory in the region of Campinas, 100 km away from São Paulo, about 60% of the portfolio sold in Brazil and neighboring countries. The remainder is imported. When the plant is ready, the company estimates to produce 15 million hectoliters per year, a volume that may double in a second stage of expansion of the plant, not yet planned.

From this future plant in the countryside of the state of São Paulo, products will be shipped to the domestic market and to neighboring countries. Hijos de Rivera sells to 60 countries, with most of the production coming from its plant in La Coruña, in the autonomous community of Galicia.

With this production projection, the Spanish company enters the fight for third position among the largest breweries in the country, currently held by Grupo Petrópolis, owner of the Itaipava and Petra brands, with 11.9% of the market. The leader, with a 61.6% share of the volume sold in 2020, is Ambev, followed by the Heineken group, with 18.1%. In 2020, 133 million hectoliters of beer were sold.

“The Brazilian market accepts well the arrival of new alcoholic beverage companies,” says the beverage analyst of the consultancy Euromonitor, Rodrigo Mattos. He highlights, however, that Estrella Galicia will find a market quite concentrated in the big three. “They need to come with very specific positioning.”

For this, the company is betting on continuing in the market of higher value-added beers and consolidating itself among the main names within this segment in the country. “We don’t want to be the most consumed, we want to be the most loved,” says Mr. Rodrigues.

One of the strategies is to create content about the world of premium beers to get even closer to the Brazilian consumer. A team of master brewers, mostly women, was chosen to produce videos and promote actions that teach more about the types of recipes and ingredients.

“We have a project to develop recipes with Brazilian ingredients. The search is for differentiation, not for large scale,” adds the executive, recalling that the company has already produced a limited edition with Brazilian grapes. Besides the potential new labels, the company is even considering producing Brazilian hops in the future, a potential investment that is beginning to be discussed with local governments. “Our whole process is very artisanal, we consider ourselves ‘big craft’. In Brazil, the main beers are very similar. We take 30 days to make a lager”, he says.

In addition, the choice for Araraquara also has to do with the quality of the product. The city is located in the region of the Guarani Aquifer, one of the largest freshwater reserves in the world. Besides, says Mr. Rodrigues, its location allows for easy distribution of the production, including export routes.

Distribution, by the way, is an “imperative” factor for the success of the venture to expand the operation in the domestic market, notes the market research company Euromonitor. In 2020, besides the challenges of the pandemic, Heineken and Grupo Petrópolis had distribution difficulties and saw Ambev increase its share.

Recently, the Spanish company announced a distribution agreement with Coca-Cola, which previously had a partnership with Heineken. Since July, Heineken started distributing its main labels, such as beers Heineken and Amstel, by itself. The Coca-Cola bottlers were left with Kaiser, Bavaria and Sol, and were able to find other beers to distribute.

The operation of Coca-Cola’s distribution network with Estrella Galicia, explains the CEO of the brewery, is in its initial phase and should strengthen the presence of the brand in more regions of Brazil. Today, its participation outside the Southeast is still tiny.

Therefore, the company is also organizing itself for the short-term scenario. For the lack of inputs, such as cans and glass, it was necessary to increase stocks and seek more suppliers. The difficulties with freight also changed the timetables: it is necessary to work with longer deadlines, due to the low offer of containers and even the availability of ships. The executive believes that this scenario will only change in 2023 but says that at least for glass bottles there is confidence that the supply will be even greater when the plant starts operating in 2024. “We have received news that there are more investments planned for this sector.”

Especially in 2020, the pandemic put pressure on volumes, Mr. Rodrigues says, and required adaptations with the migration of all sales to retail, as bars and restaurants were closed. Now, the out-of-home channels are starting to show signs of recovery, which brings better margins. In the year, volumes in Spain exceed 2019, before the pandemic, by 30%, and in Brazil by 15%. The company expects to end 2021 with revenues of 600 million euros, 25% more than a year earlier, says Mr. Rodrigues.

“Next year will also bring many uncertainties, but we believe that the market will remain very heated and with a growth trend in the premium segment. Brazilians are learning to consume new flavors and there is still a lot to develop here.”

Source: Valor international

https://valorinternational.globo.com/

Debt payment will have cap to ensure existential minimum

Assistência jurídica aos necessitados integra direito ao mínimo existencial  GEN Jurídico

The Brazilian government has put under debate a crucial issue for the over-indebted: how much creditors can take from the debtor so that there is enough money left over at the end of the month to pay for current expenses, such as food and housing. The government is working on the regulation of the so-called “existential minimum” – provided in the Law of Superindebtedness, in effect since July.

The definition is not at all trivial. When granting credit, the financial firm, according to the law, cannot grant a loan if it verifies that the minimum the person needs to live will be compromised. In the renegotiation of debts, the agreement must foresee a payment plan that leaves a surplus of money for basic expenses – a percentage on income that the courts, even without regulation, have been establishing already.

“This limit must be observed in the relationship between the institution and the borrower. But the law also brings a collective perspective, of looking at the total level of indebtedness of the consumer,” said Fábio Ozi, a partner at the law firm Mattos Filho, who found that 24 out of 40 court decisions based on the new law deal with the existential minimum.

The discussions to turn this abstract concept into a calculation are heated and, at the moment, under analysis by the Chief of Staff Office. What is being evaluated today, according to the National Consumer Secretariat (Senacon), under the Ministry of Justice, is the possibility of starting the regulation with a fixed value. “However, there is a complexity to adapt each case individually,” the agency told Valor in a note.

The Superindebtedness Law (No. 14.181, 2021) updates the Brazilian Consumer Defense Code (CDC) and targets the prevention and treatment of aggravated indebtedness, which affects about 30 million Brazilians, according to an estimate by the Consumer Defense Institute (Idec). Currently, R$2.4 trillion of bank credit is granted to individuals, according to the Brazilian Federation of Banks (Febraban).

Specialists disagree on how the calculation should be made. For professor Claudia Lima Marques, who was the rapporteur of the commission of jurists that drafted the law, the definition should not be a straightjacket. The solution, she says, is to foresee the essential expenses that should be included in the calculation, such as expenses with power, water, internet and formal education. “Establishing a low level would leave many people out of the renegotiations, and the idea is to let everyone in,” she says.

The Brazilian Federation of Banks (Febraban), on the other hand, calls for an absolute and identical value for all Brazilians, without discriminatory criteria. “Otherwise, there will be legal insecurity, with a contraction and increase in the cost of credit,” it says in a statement.

The entity also points out a “practical impossibility” of mapping all the debts incurred by the client, in order to ensure the existential minimum in the granting of credit. “About 40% of Brazilians are informal workers and there is no database that consolidates all the debts (banks, cards, commerce, water, light, telephone, gas, etc) of the consumer,” it says.

While the regulation is not ready, judges and regulatory agencies have imposed limits, based on the new law and the right to the existential minimum. Judicial decisions have set a cap – ranging from 30% to 60% of the debtor’s income – for the payment of debts. The remainder must be uncommitted for basic expenses.

One example of this is the case of a fireman with more than 60% of his income committed to pay off a global debt of R$24,600 with six financial firms. The loans were contracted in the form of a deduction from the payroll and direct debit from the current account. In total, the expense with the payment of the debt installments was R$1,060 against a monthly income of R$1,699.85 – excluding alimony due to the child.

A court denied the fireman’s request. The judge considered that he took out the loans because he wanted to and that it would not be Justice’s role to help those who voluntarily get into debt, “under penalty of increasing the risk rate and the financial burden of those who pay their bills on the due date.”

He appealed to a higher court, which reversed the sentence. It recognized the situation of over-indebtedness and limited the payments to 30% of his wages. Therefore, each financial firm was allowed to withdraw 5% of the debtor’s income to pay off the loans.

Source: Valor international

https://valorinternational.globo.com/