Dividends still key to Brazil’s fiscal plan despite decline

Payouts from state-run companies may fall R$20 billion in 2025 but remain vital to primary target

 

 

 

12/22/2025 

The Brazilian federal government expects to receive R$52.4 billion in dividends and profit-sharing payments from state-owned and mixed-capital companies in 2025. While this is lower than last year’s total, it would still mark the third-largest figure in the historical series and is crucial to helping the economic team meet its primary fiscal target, within the tolerance band.

The government’s fiscal goal is a balanced primary result—revenues equal to expenses—with room for a deficit of up to R$31 billion.

In 2024, the government received R$72.4 billion, driven by extraordinary dividend payouts from Petrobras and the Brazilian Development Bank (BNDES). That figure, in nominal terms, is second only to the record R$87 billion in 2022, more than half of which came from the oil giant, based on National Treasury data tracked since 1997.

As of October 2025, the latest month with available data, the government had already received R$38.1 billion in dividends. It expects another R$14.3 billion to come in during the last two months of the year, reaching the R$52.4 billion target published in the latest Bimonthly Revenue and Expenditure Report, which updates the government’s fiscal projections.

Dividend revenues were higher in 2024 due to early and extraordinary distributions by state-owned firms, explained Alexandre Andrade, director at the Independent Fiscal Institution (IFI). “At the end of 2024, in November and December, Petrobras and BNDES paid R$29.1 billion in early and extraordinary dividends. Over the full year, those exceptional payments totaled R$38.1 billion,” he said. “In 2025, these are expected to reach just R$10.9 billion.”

Oil prices also played a role in the decrease in Petrobras payouts. The U.S. Energy Information Administration (EIA) reported an average barrel price of $80.52 in 2024, compared to $69.70 this year through November, affecting the company’s profit and thus its dividend distribution.

Banco do Brasil also paid less in dividends this year, in part due to weaker results. The government lowered its original revenue estimate from the bank by R$1.5 billion.

New record

Even with the drop, 2025 is set to deliver the third-largest dividend haul in the Treasury’s records. The main contributors remain BNDES and Petrobras.

So far in 2025, Petrobras has paid R$12.5 billion to the federal government. On Monday (22) the company said it would make another transfer of R$1.3 billion, related to second-quarter 2025 profits. This will bring the total for the year to R$13.8 billion, still below the R$29.7 billion paid in 2024.

BNDES, meanwhile, transferred R$16.1 billion in dividends through October 31. It has not disclosed whether additional payments were made in November or December. In 2024, the bank paid R$29.5 billion to its controlling shareholder, the federal government.

Next in line is Caixa Econômica Federal, which paid R$5.11 billion this year. These payments included interest on equity based on 2024 results, remuneration on hybrid capital and debt instruments (IHCD), and profit distribution from the first half of 2025. The bank said it does not expect further payments by year-end.

Banco do Brasil had paid R$3 billion through October, according to the Treasury. The bank did not confirm whether additional transfers were made in the final two months. Other contributions came from various smaller state-owned and mixed-capital enterprises.

GDP slowdown

These dividend transfers have helped the government offset a decline in tax revenue from administered taxes, which underperformed in the second half of the year as the economy began to slow. Administered taxes include revenues from taxes and social contributions.

Publicly, Finance Ministry Executive Secretary Dario Durigan has defended using dividends from state-owned banks to strengthen the federal fiscal position and avoid mandatory budget freezes.

“We have no issue using bank dividends to support the bimonthly report, as long as it’s done in a planned manner,” Durigan said in a press conference in September. “If needed, we will use dividends from public companies to deliver on fiscal policy,” he added.

“Undoubtedly, this revenue [from dividends] has been important to close the government’s accounts and meet fiscal targets. This was especially true in 2024 and is likely to happen again in 2026, though to a lesser extent given the fiscal consolidation required and adverse conditions such as economic slowdown and falling oil prices,” said Tiago Sbardelotto, a fiscal economist at XP Investimentos.

For 2026, the proposed Annual Budget Bill (PLOA) forecasts R$54.1 billion in revenue from dividends and profit-sharing, in line with 2025 projections. Sbardelotto expects Petrobras and Banco do Brasil to maintain similar payout levels next year, while BNDES may increase its transfers.

By Jéssica Sant’Ana — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Kalshi eyes Brazil as part of global expansion plans

Brazilian founder Luana Lopes Lara, the world’s youngest self-made female billionaire, says the company aims to expand its regulated prediction markets internationally

 

 

 

12/22/2025

Luana Lopes Lara
Luana Lopes Lara — Photo: Reprodução/Instagram

Kalshi, the U.S.-based prediction market platform co-founded by 29-year-old Brazilian Luana Lopes Lara, who became the world’s youngest self-made female billionaire, is exploring expansion into Brazil. In an interview with Valor, Lara said the company, now valued at $11 billion after its latest funding round, is preparing to accelerate its international growth, with her home country among the top priorities, although plans remain in early stages.

Valor: How did the idea to start Kalshi come about?

Lara: We worked in finance for three years. I was at Bridgewater and Citadel; Tarek [Mansour, Kalshi’s co-founder] was at Goldman Sachs and Citadel. We realized that everything traded in financial markets reflects expectations about future events. If someone believed Brexit would happen, they’d short the pound or buy European stocks, building a portfolio based on that. But it was all an indirect way of expressing a view on an event.

Valor: Isn’t that how markets are supposed to work?

Lara: If you expect something to move, you position for it. But that’s not efficient. If a war breaks out at the same time as Brexit, for example, it’s hard to know which asset reacts to what. There are too many variables. What matters is the event itself. We wanted to create an exchange where people could directly buy or sell outcomes, instead of relying on proxies or indirect instruments.

Valor: Kalshi had to fight regulatory battles to launch and expand, especially on elections.

Lara: It was incredibly tough to start from scratch. Coming from finance, we were set on doing everything by the book because we wanted institutions like Goldman Sachs and Bridgewater to eventually use our products. That wouldn’t be possible without proper regulation.

We worked with U.S. regulators for three years to show them how this was similar to markets they already oversee. In other sectors, like Uber or Airbnb, the model has been “ask forgiveness later.” That doesn’t work in finance. There’s money involved, and you have to be right from day one. After launching, we faced another long battle for election-related markets, which took over two years, and we had to sue the government. That was a hard decision. Suing your regulator is extremely delicate; there’s always the risk of retaliation or delays. In that sense, the U.S. isn’t so different from Brazil.

Valor: A significant portion of Kalshi’s revenue now comes from sports. How is that different from betting?

Lara: Sports are a massive industry with real economic exposure. We’re especially focused on helping companies hedge against those risks. For example, there are markets about where the NBA Finals will be held. Depending on how many games the series goes, hotels can see huge swings in occupancy. That’s real financial exposure. Sports and entertainment face risks that historically haven’t had the same risk-management tools as sectors like agriculture.

Valor: But how does a single game outcome fit into this?

Lara: There’s also the “price discovery” aspect. Even if an event doesn’t have direct economic consequences, the information embedded in the market price is valuable. If a candidate is trading at 70% odds, that says something. Same with sports: publicly traded clubs, for example, see their stock prices move based on game results. That’s why we draw a clear line between what we do and traditional gaming. We focus on hedging, trading, risk, and price signals, none of which exist in poker or slot machines.

Valor: What about the risk of insider trading, like someone betting on the next Time cover?

Lara: It works like insider trading in equity markets. But since we’re regulated, we’re required to know who’s behind every transaction, where they work, who they are. Our compliance team monitors everything. If someone manipulates the market or breaks the law, they can be prosecuted, just like in equity markets.

Valor: Has that been enough to prevent abuse?

Lara: Of course, no system is perfect. Misconduct can happen, as it does in stock markets. But we have mechanisms to investigate and act. Notably, all known insider trading cases in prediction markets happened at Polymarket, which operates offshore. They don’t use KYC rules. One person can use multiple wallets. There’s no accountability.

Valor: Are there any records of insider trading at Kalshi?

Lara: There are no records of this type of case in regulated markets in the United States, such as Kalshi. In addition, all trades executed on Kalshi are reported to the government. Authorities independently analyze the data to ensure that we are fulfilling our role properly and to identify any potential irregularities.

Valor: After raising $1 billion, what’s next for Kalshi?

Lara: We’re just getting started. One of the first things we announced after the round was our plan to expand internationally. Brazil means a lot to me. I really want us to operate there. We’re still studying how to do it, but I hope we can announce something in early 2026. We also want to grow in other countries. We envision something similar to CME, where you can access U.S. products from Brazil. In addition, we want to gradually develop other structures, such as margin and leverage, though that’s more of a longer-term plan. It would help us move toward a more institutional trading profile.

Valor: How do you see your entry into the Brazilian market?

Lara: We’re just beginning to explore. There’s nothing like Kalshi in Brazil today, just betting platforms or derivative markets, which is where the U.S. was before Kalshi. We want to find a way to bring our model to Brazil, using what we’ve learned in the U.S. But it’ll depend on our lawyers and regulatory review. Nothing has been finalized yet.

Valor: Are institutions already using Kalshi?

Lara: Absolutely. On the market-making side, major funds like Susquehanna and Jump Trading are active. On the hedging side, there are funds, family offices, and companies buying contracts to manage risk. We even offer request-for-quote (RFQ) trading for large orders, say, someone wants to buy $10 million worth. That’s common in institutional environments and already works on our platform.

Valor: Any public examples?

Lara: Yes. Underdog, a fantasy sports company, publicly said they use Kalshi to hedge their exposure. Another is Arrived, in the mortgage sector. They used Kalshi to hedge against a possible U.S. government shutdown, buying over $1 million in contracts, essentially like buying insurance.

Valor: Any plans to go public?

Lara: Listing the company is important, but not now. We don’t know when. For now, the focus is on building the best product, growing as much as we can, both in the U.S. and globally, launching more products, and scaling on all fronts.

Valor: Was bringing Donald Trump Jr. on as a strategic advisor due to regulatory concerns?

Lara: Kalshi is highly regulated. Since we operate in elections and politics, we need to engage with Congress, the Senate, and the White House. That’s the nature of our business. We need people who understand how Washington works, how to explain our model to both sides of the aisle.

Valor: Isn’t Trump Jr. too politically charged?

Lara: He’s not in office, and we don’t view him as a politician. We’re close to leaders across the political spectrum: Senate, House, White House, and even state governments. Our advisory board includes people from both sides, and we look for the best individuals to help us navigate the regulatory landscape.

*By Gabriel Roca, Valor — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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China signals long-term interest in Mercosur trade deal

Beijing keeps talks on the table despite current hurdles, as global trade realigns

12/22/2025 

China, the world’s second-largest economy, continues to signal to Mercosur diplomats its interest in negotiating a free trade agreement with the South American bloc, even while acknowledging that such a deal remains out of reach for now.

People familiar with the matter told Valor that Beijing has communicated flexibility and a willingness to keep the issue on the agenda, even though it does not expect progress in the short term. The Chinese government appears to be patiently laying the groundwork for a future agreement.

The current context is one of global trade realignment, with countries increasingly seeking preferential arrangements as a way to diversify exports and shield themselves from the effects of unilateral policies by the United States.

Amid global instability, ideas that once seemed unrealistic are now at least being taken seriously. Mercosur, for its part, is showing signs of frustration with the European Union’s repeated delays in concluding the long-awaited bi-regional agreement.

Uruguay had for years attempted to negotiate a bilateral deal with China. While Chinese officials expressed interest, they eventually made it clear that such a move would be diplomatically unfeasible, as it could offend Brazil and undermine Mercosur cohesion. A deal with Montevideo alone would strike at the heart of the bloc’s unity.

Even before, a preferential agreement between China and Mercosur was seen as complex. Now it may prove even more challenging, as Chinese exports continue to surge. In 2024, Brazil saw the highest percentage increase in Chinese exports among global partners, up 22%.

This year, China’s shipments to Brazil are still growing faster than Brazilian exports to China, eroding Brazil’s trade surplus in the bilateral relationship. Most of Brazil’s active anti-dumping measures target Chinese products.

Political factors within Mercosur also pose challenges, particularly Argentina’s close alignment with the United States. Washington has adopted a new, more assertive version of the Monroe Doctrine and is seeking to curb China’s influence in the region.

Despite ongoing U.S. opposition, China’s export performance continues to unsettle trading partners. In November, the country posted a $1 trillion trade surplus, a sign of its success in diversifying export markets with competitively priced, high-quality products.

At the same time, however, Beijing is beginning to restrict access to its own market. One emerging concern among partners is an ongoing investigation that may result in import quotas on beef. If confirmed, Brazil would be one of the countries hardest hit.

Brazil’s manufacturing sector has long expressed unease about trade flows with China. Still, back in 2023, when China first hinted at its interest in a deal with Mercosur, representatives from the National Confederation of Industry (CNI) said negotiations didn’t need to start with a full-fledged free trade agreement. They suggested exploring alternatives, such as a deal focused on trade facilitation.

China’s strategic position in global trade has been built in part through a network of free trade agreements, which provide mutual tariff preferences for Chinese companies and their partners.

Beijing currently has 23 free trade agreements in effect, covering 30 countries and regional blocs such as ASEAN (Association of Southeast Asian Nations), which includes 11 fast-growing economies. Another 10 deals are under negotiation and eight are in the study phase.

In Latin America, China already has trade agreements with Chile, Peru, Costa Rica, and Ecuador. Talks are underway with Honduras and Panama, and a feasibility study is ongoing with Colombia.

Despite the current obstacles, China is moving steadily into the Mercosur orbit—with the patience that an authoritarian regime allows—keeping the door open for a preferential trade deal in the future.

*By Assis Moreira — Geneva

Source: Valor International

https://valorinternational.globo.com/

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Enel São Paulo crisis fuels takeover interest in concession

Market points to Âmbar, Equatorial Energia, CPFL as potential buyers

 

 

 

12/18/2025 

Retail businesses without power in São Paulo: recurring problems at Enel are drawing interest from potential buyers — Foto: Paulo Pinto/Agência Brasil
Retail businesses without power in São Paulo: recurring problems at Enel are drawing interest from potential buyers — Photo: Paulo Pinto/Agência Brasil

After the government decided to initiate the process to terminate the Enel São Paulo power distribution concession, names of companies reportedly interested in taking over the utility’s operations began circulating behind the scenes, in a potential change-of-control scenario. Market participants point to Âmbar, the energy arm of the J&F group owned by brothers Joesley and Wesley Batista, Equatorial Energia, and CPFL Energia as possible candidates.

Contacted by Valor, Âmbar declined to comment. CPFL said it does not comment on market speculation. Equatorial had not responded by the time this edition closed. For market sources, declaring forfeiture is seen as a more lengthy route, while a change of operator could be a simpler solution. The companies are eyeing what is considered one of the country’s most complex concessions, characterized by high population density and strong cash flow generation. Enel São Paulo serves 24 municipalities in the metropolitan region, covering about 8.5 million properties, including the city of São Paulo, and holds a contract running through 2028. It is the largest power distribution concession in Latin America.

Last week, more than 2.2 million properties in the metropolitan area were left without electricity after an extratropical cyclone brought winds of nearly 100 km/h. It is the third consecutive year in which extreme weather events disrupted service and triggered criticism over delays in restoring power.

In a statement, Enel said it has fully complied with all regulatory indicators and delivered “consistent improvements” across all service quality metrics, “as evidenced by inspections recently conducted by the regulator.” The company also said that climate change has made Greater São Paulo increasingly exposed to extreme weather events.

“This measure requires a structured plan coordinated with public authorities, defining the most appropriate modalities for adequate compensation of this investment. The company is willing to make these investments as part of a strategy shared with all involved institutions,” the statement reads.

Enel added that it reaffirms its confidence in Brazil’s legal and regulatory framework to ensure security and stability for investors with long-term commitments in the country.

Âmbar has financial capacity and has recently taken on complex assets, such as the Amazonas Energia and Roraima Energia distribution utilities, as well as generation projects. Its most recent acquisitions include a minority stake in Eletronuclear and the Norte Fluminense gas-fired power plant from France’s EDF. On the other hand, the company lacks a significant track record in power distribution in large urban centers, which could weigh on a regulatory review.

Equatorial Energia is another potential candidate. The group is recognized for strong operational expertise in distribution and a track record of turning around troubled concessions. Holder of concessions in northern and northeastern states, Equatorial is also a shareholder in the São Paulo water utility Sabesp, which could, in theory, create synergies between services, according to people familiar with the matter. However, the company is currently highly leveraged due to its recent acquisition of a stake in Sabesp as a primary shareholder, which could constrain its financial capacity, according the sources. Third-quarter 2025 financial statements indicate leverage of 3.3 times.

CPFL Energia is seen by many as the most obvious candidate in a potential reshuffle. The company already operates in São Paulo state, has an established operating structure, low leverage, and financial backing from the owner, the Chinese company State Grid. CPFL has also shown historical interest in Enel assets, having previously attempted to acquire Enel Ceará (formerly Coelce).

Specialists interviewed by Valor caution, however, that it is too early to predict an outcome for Enel, which has made significant investments in the grid in recent years and is unlikely to relinquish the concession easily. Some see the possibility of litigation if forfeiture proceeds, especially if the utility’s quality indicators or economic-financial balance remain within the limits set by the Brazilian Electricity Regulatory Agency (ANEEL).

Forfeiture occurs when a distributor fails to comply with obligations established by the regulator in the concession contract. In the case of power distributors, the measure can generally be applied when service quality indicators that track power outages exceed ANEEL’s limits. The main metrics are duration (DEC) and frequency (FEC) of power outages. Financial issues that could impair service provision can also trigger forfeiture.

On Wednesday (17), Mines and Energy Minister Alexandre Silveira formally requested that ANEEL initiate the process to declare Enel’s São Paulo concession forfeited—the first step toward terminating the contract.

The agency said its inspection unit will assess the recurrence of service failures related to the December 10 blackout. The company is already being monitored by the regulator due to outages in October 2024, also caused by storms.

In November 2023, Enel São Paulo took a week to restore power to about 3 million consumer units following heavy rainfall and winds exceeding 100 km/h.

*By Fábio Couto, Robson Rodrigues and Marlla Sabino — Rio de Janeiro, São Paulo, Brasília

Source: Valor International

https://valorinternational.globo.com/

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Supreme Court forms majority against cutoff for Indigenous land claims

Six justices have already found temporal milestone thesis unconstitutional; trial set to end today

 

 

12/18/2025 

A majority of justices of Brazil’s Supreme Court have voted to strike down provisions of the so-called temporal milestone law on the demarcation of Indigenous lands, which states that tribes would only be entitled to lands they occupied or that were under dispute on the date the Constitution was enacted: October 5, 1988.

The majority was secured with the vote of Justice Alexandre de Moraes, who sided with the rapporteur, Justice Gilmar Mendes. He was also joined, with some specific reservations, by justices Flávio Dino, Cristiano Zanin, Luiz Fux and Dias Toffoli. Still to vote are Justices Cármen Lúcia, Kassio Nunes Marques, André Mendonça and Edson Fachin.

The case is being heard in the court’s virtual plenary and is scheduled to conclude at 11:59 p.m. on Thursday (18). Justices may still change their votes, request that the case be moved to an in-person session, or ask for more time to review the matter.

Casting the final vote so far, Moraes reiterated the position he took in the 2023 ruling, when he was one of nine justices who voted to overturn the time-limit doctrine. At the time, he said the date of the Constitution’s enactment should be seen as an “x-ray plate” of territorial occupation to strike a balance between the rights of Indigenous peoples and private property.

Moraes also agreed with Mendes’s argument that Congress cannot enact legislation contrary to the Supreme Court’s interpretation, but only regulate demarcation procedures. Like Dino, Moraes said this understanding could not be changed even through the approval of a proposed constitutional amendment (PEC).

“The fundamental nature of the right at issue, which elevates the matter to the status of an entrenchment clause, part of the Constitution’s rigid and immutable core, would prevent any attempt to alter this understanding through a constitutional amendment, since adopting the time limit would amount to distorting Article 231 of the Constitution and violating the principle prohibiting social regression,” Moraes said.

The ruling comes after the Senate last week approved a PEC seeking to reinstate the so-called temporal doctrine. The proposal had been shelved pending a decision by the Supreme Court, but was rushed through as a reaction to a decision by Justice Mendes that tightened rules for the impeachment of Supreme Court justices. The amendment still needs to be approved by the Chamber of Deputies, which is not expected to happen this year.

Toffoli also sided with the court’s most senior justice, but added reservations to ensure that good-faith improvements made by non-Indigenous occupants can be compensated until the demarcation process is concluded. He also said existing rules governing the role of anthropologists, experts, and other specialists in demarcation proceedings are sufficient.

In addition, he voted to reject compensation claims based on administrative documents without valid legal titles and, regarding state omission, stressed that conciliation is possible at any stage of the dispute and that review is part of the demarcation process.

Mendes’s vote opened the trial on Monday (15). He said the time-limit doctrine represents “a situation that is difficult to prove for Indigenous communities that were historically dehumanized through state or private practices of forced removal, killings and persecution.”

He also acknowledged a historical failure by the Brazilian state to conclude demarcation processes and set a 10-year deadline for the federal government to complete pending procedures.

Mendes further voted to allow Indigenous territories to be used for economic purposes, provided that the benefits accrue to the entire community and land possession is preserved.

Finally, he found unconstitutional the ban on expanding the boundaries of already demarcated Indigenous lands, arguing that the Constitution guarantees the correction of administrative acts with “serious and irremediable” errors.

In 2023, the Supreme Court struck down the time-limit doctrine by a 9-2 vote. In response, Congress passed a bill validating the doctrine. As a result, different parties and organizations took the matter to the Supreme Court, some seeking to uphold the law and others calling for it to be overturned.

The cases were assigned to Mendes, who set up a conciliation panel among the parties to seek consensus. In June 2025, the commission presented an agreement signed by the federal government, Congress, Indigenous peoples, and farmers, after 23 hearings held by the group.

Prior Supreme Court trial of the temporal milestone thesis in 2023, when it was struck down for the first time — Foto: Carlos Moura/SCO/STF
Prior Supreme Court trial of the temporal milestone thesis in 2023, when it was struck down for the first time — Photo: Carlos Moura/SCO/STF

*By Giullia Colombo — Brasília
Source: Valor International
https://valorinternational.globo.com/

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Brazil’s nuclear reactor still on paper after 17 years, R$5bn planned

Brazilian Multipurpose Reactor project drags on amid delays and revisions

 

 

 

12/17/2025 

Radiopharmaceuticals are used in cancer diagnostics and therapies
Radiopharmaceuticals are used in cancer diagnostics and therapies — Photo: Divulgação ABDAN

Nearly two decades after the government promised a reactor capable of producing radioisotopes—radioactive elements that underpin radiopharmaceuticals used in cancer diagnostics and therapies—Brazil remains far from having the equipment available to society. The Brazilian Multipurpose Reactor (RMB) project has dragged on through postponements, revisions, and ceremonial events that have done little to change its pace.

Created to reposition the country in the nuclear research landscape and reduce external dependence, the RMB has advanced slowly despite R$5 billion earmarked for the project, according to the Ministry of Science, Technology, and Innovation (MCTI).

The reactor is the responsibility of the National Nuclear Energy Commission (CNEN) and, between 2008 and 2025, went through a succession of altered timelines, internal reviews, restarted phases, supplementary studies, budget interruptions, and debates over infrastructure, management, and governance. According to the agency, more than R$1.2 billion has already been allocated to the project through the National Fund for Scientific and Technological Development (FNDCT).

In February, the federal government held a new ceremony marking the start of construction of the reactor, to be implemented in Iperó, in the state of São Paulo, an event treated as a milestone by the MCTI. The first such ceremony took place in 2018, under former president Michel Temer. Nearly a year after the latest event, sentiment within the nuclear sector remains skeptical. Experts interviewed by Valor said the ceremony did not translate into real progress and that the project remains stalled by management failures.

The National Nuclear Safety Authority (ANSN), the agency responsible for sector regulation, said the licensing process has accumulated pending issues, in addition to an insufficient number of staff assigned to move the process forward. Today, there are more than 200 outstanding documentary requirements, including the Preliminary Safety Analysis Report (RPAS).

“This stage of licensing is of key importance, as it is when the regulator analyzes and understands the project’s overall concept, as well as how the applicant intends to address design-basis accidents and the performance of structures, systems, and components, both under normal operating conditions and during transients that challenge safety. Once this Preliminary Report is approved, it becomes possible to issue the Construction License for the project, even if accompanied by conditions and non-blocking requirements,” ANSN said in a statement.

The view that the bottleneck is essentially managerial is shared by representatives of the nuclear market, who for years have warned of CNEN’s difficulty in advancing the project even when funding is available. For Celso Cunha, president of the Brazilian Association for the Development of Nuclear Activities (ABDAN), the inability to execute is the main obstacle to completing the project.

“I firmly believe this is a management problem. We have a research institution managing the construction of a reactor, a major project. That’s not the usual skill set of this type of institution. It requires a whole body of work that is not trivial. Large engineering companies are used to doing this. That’s why it concerns us, and we are not seeing a reaction from the institution [the Institute for Energy and Nuclear Research (IPEN), CNEN’s technical-scientific unit in São Paulo] in that direction,” he said.

CNEN said the reactor is estimated at R$3 billion, with complementary laboratory and infrastructure facilities totaling R$2 billion. The commission attributes the slow pace to the budgetary and institutional context of recent years.

“Projects like the RMB require a strong budgetary and institutional base. The RMB was incorporated into the New PAC in 2023 and treated as a priority by the MCTI. For the RMB to be completed, continuous financial and institutional commitment is essential. In 2025, the ministry and CNEN held the ceremony marking the start of infrastructure works, signaling the transition to the practical phase of implementation,” the agency said.

“Infrastructure works at the site are being completed (earthworks, bridge, access roads, and internal roads). As for licensing, the environmental permit [from federal environmental agency IBAMA] has already been issued, and nuclear licensing has begun, which continues throughout the entire implementation process until the final stage, when the operating permit is issued,” it added.

The MCTI, in turn, said execution of the works and allocation of resources will take place “over the next five years,” until completion of the complex. Both ANSN and ABDAN agree that the project has been structured in a highly centralized manner, with too few professionals involved.

While the RMB is not completed, Brazil remains dependent on imported radioisotopes. Today, virtually all supplies come from the Netherlands, Russia, and, to a lesser extent, Israel. The fact that the latter two countries are involved in geopolitical conflicts makes supply unstable.

The situation is already affecting public healthcare services. In a statement, the president of the Brazilian Society of Nuclear Medicine (SBMN), Elba Etchebehere, pointed out that the country faces “persistent shortages resulting from production capacities that still do not fully meet the sector’s needs,” and that only about one-third of national demand for radiopharmaceuticals is currently met. For her, expanding production is essential to stabilize supply and ensure public access to exams and treatments.

The domestic structure responsible for processing part of these inputs also faces limitations—this time, regulatory. According to a letter sent by ABDAN to ANSN, reviewed by Valor, IPEN’s radiopharmacy currently does not have an active operating authorization due to infrastructure and regulatory compliance issues. The facility was at one point shut down by the Health Surveillance Coordination Office and, according to the association, remains barred from expanding capacity or making structural changes until documentation for license renewal is submitted.

These materials are processed at IPEN, but because they are imported, a significant portion loses effectiveness during transit before reaching Brazil. The race against the clock is due to the so-called “half-life.” Radioisotopes have a specific physical behavior: they degrade rapidly. “Half-life” refers to the time it takes for half of a radioactive substance to decay.

Brazil’s situation contrasts with that of neighboring countries. Argentina already produces radioisotopes that Brazil cannot, reinforcing perceptions of technological lag and a lack of planning in the country’s nuclear sector.

The RMB would eliminate this problem. The reactor would have an impact not only on healthcare but also on science, technology, and industry. According to the MCTI, the project is designed to support the development of domestic technology for manufacturing nuclear fuels and materials used in research and power reactors.

*By Robson Rodrigues and Isa Morena Vista — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Extreme weather wiped R$126bn from Rio Grande do Sul farms

Grain losses totaled 48.6 million tonnes over five years, according to trade group Farsul

 

 

 

12/17/2025 

Between 2020 and 2025, farmers in Rio Grande do Sul lost a total of R$126.3 billion in revenue due to climate-related events such as droughts and floods, according to the state’s Agriculture Federation (Farsul). The group estimates that 48.6 million tonnes of grain production were lost during this five-year period, based on the gap between expected and actual harvests.

The agricultural sector in the state faced another year of losses in 2025. Farsul estimates a shortfall of 8 million tonnes from an expected harvest of 39 million tonnes of rice, corn, soybeans, and wheat. Only slightly more than 31 million tonnes were harvested. As a result, the sector’s Gross Production Value is expected to come in nearly R$20 billion below forecast this year. Farsul projects a 10.66% contraction in Rio Grande do Sul’s agricultural GDP for 2025.

“We’re facing an extremely challenging outlook, especially given the direction of Brazil’s economy,” said Farsul President Gedeão Pereira during a press conference.

He stressed the need for investments in irrigation and soil management to reduce the impact of droughts, but noted that farmers’ financial difficulties will likely delay these improvements. “These measures aren’t cheap, and in the crisis we’re facing in the state, implementing them will take even longer,” he said.

Following consecutive years of droughts and floods, farmers’ repayment capacity has deteriorated, leading to a sharp rise in defaults. The state’s rural loan default rate rose from 0.79% in August 2024 to 3.28% in August 2025. The total amount in default jumped from R$699 million to R$3 billion over 12 months, a 331% increase.

This deterioration in credit quality has forced financial institutions to reassess their risk exposure. Banks are now demanding more collateral, reducing exposure, and making it harder for farmers—especially tenants without real guarantees—to obtain financing, Farsul said.

“There was a 21% drop in the number of rural credit borrowers in Rio Grande do Sul for the 2025/26 planting season. And we have an 11.4% default rate on rural credit due to high interest rates,” said Antônio da Luz, Farsul’s chief economist.

Credit performance in the state confirms this tightening. According to Central Bank data analyzed by Farsul, rural production loans fell 10% over 12 months and 23% between July and November. The number of contracts dropped 13% and 20% in the same periods, respectively.

Investment credit declined even more sharply. Over 12 months, the total amount borrowed dropped 23%, and by 41% between July and November. The number of investment contracts fell by 27% and 40%, respectively.

Debt renegotiation

In this context, Farsul called for changes to provisional presidential decree (MP) 1314/2025, which addresses the renegotiation of rural debts. The measure offers financial relief for farmers and cooperatives affected by crop losses between 2020 and 2024 and authorizes up to R$12 billion in credit for debt renegotiation.

The federation is asking for several adjustments to ensure broader access to the program, including the inclusion of 2025 crop-year loans, a revised cutoff date for default status, the inclusion of previously renegotiated loans aimed at maintaining good standing, prioritization of market-rate credit operations, and an increase in available funds.

Farsul is also advocating for the approval of Bill 5122/2023, currently under review in Brazil’s Congress. The bill addresses the securitization and renegotiation of rural debts and would authorize the use of the Social Fund (financed by pre-salt oil revenues) to create an emergency credit line for farmers affected by natural disasters.

“We’re working to improve MP 1314. If those changes aren’t enough, we’ll appeal to the Senate president to bring Bill 5122 to a vote. It’s much more comprehensive,” said Domingos Velho Lopes, Farsul’s newly elected president, who will take office on January 1.

*By Marcelo Beledeli — Porto Alegre

Source: Valor International

https://valorinternational.globo.com/

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Governments unite to seek termination of Enel’s contract in São Paulo

Federal, state and city administrations back request to start concession termination process

 

 

12/17/2025 

Brazil’s Ministry of Mines and Energy will formally request that the ANEEL, the country’s electric power regulator, initiate the termination process of Enel’s electricity distribution concession in São Paulo, Energy Minister Alexandre Silveira announced on Tuesday (16) alongside São Paulo Governor Tarcísio de Freitas and São Paulo Mayor Ricardo Nunes. The move marks the first official step toward ending the company’s contract.

The announcement followed a meeting at the São Paulo state government headquarters between the three officials. Last week, high winds exceeding 90 km/h knocked out power for 2.2 million homes in the metropolitan region served by Enel, affecting over 8.5 million people.

Silveira, Tarcísio, and Nunes presented a united front in calling for the contract’s cancellation. “Enel has lost the necessary conditions, reputationally included, to continue providing concession services in São Paulo,” Silveira said. “We are jointly urging the regulatory agency to start the process of terminating Enel’s concession in São Paulo.”

“We are fully aligned—federal, state and municipal governments—to initiate a rigorous regulatory process. We expect ANEEL to respond as quickly as possible to the people of São Paulo by starting the termination procedure, which will certainly result in better power distribution services,” Silveira added. He did not provide a timeline for ANEEL’s decision.

Governor De Freitas called Enel’s situation in the state “absolutely unsustainable.” “It can no longer provide services. There is a serious reputational issue, and it repeatedly leaves our population stranded,” he said. “We have agreed that there is no alternative but to proceed with the most severe measure available in the concession contract: declaring its termination.”

‘No other alternative’

He added that both the state and municipal governments will submit studies to the Ministry and Aneel detailing Enel’s repeated failures in São Paulo to support the case for ending the contract. “There is no other alternative,” he said. “This is the main regulatory measure available and carries serious consequences, including the suspension of the right to request an early contract renewal.”

Enel serves 24 municipalities in the metropolitan area, including the capital. Its contract runs through 2028. Despite repeated outages and service failures, the company has already requested an early renewal from ANEEL.

Mayor Nunes reiterated that the federal ministry would press ANEEL to begin the termination process. “Enel lacks the structure and commitment to meet the region’s needs, especially when faced with adverse events stemming from climate change,” he said.

Both Nunes and Tarcísio said the joint meeting of the three government levels was encouraged by President Luiz Inácio Lula da Silva, who is closely monitoring the issue. On Friday, the governor and mayor briefly spoke to Lula about the situation during the launch event of the SBT News channel in São Paulo.

As of 7 p.m. Tuesday, Enel’s website showed 47,526 properties in São Paulo without power, about 0.81% of its clients in the city. On Monday, the number was 25,000. Other cities in the metro area saw double-digit outage rates: São Lourenço da Serra (13.8%), Ribeirão Pires (11.47%), and Juquitiba (10.8%). The storm hit the region on Wednesday (10).

Power outages have been a persistent issue for Enel’s service areas in São Paulo. In 2023, 2.1 million homes were left without power; in 2024, the number rose to 2.4 million.

In a statement, the São Paulo city government said Enel had signed a cooperation agreement committing to 282,271 tree prunings this year. “However, only 31,945 prunings—11% of the Annual Pruning Plan—had been completed by the company as of Monday (15),” the statement said. “This pitiful result proves the concessionaire’s lack of commitment and the poor quality of service provided to the people of São Paulo.”

Enel did not respond to a request for comment.

*By Cristiane Agostine and Gabriel Caprioli — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil remains optimistic about EU deal

Government expects Mercosur pact to be signed despite concerns over safeguards

 

 

 

 

12/16/2025 

EU safeguards could temporarily suspend tariff preferences on Mercosur farm imports — Foto: Marcos Oliveira/Agência Senado
EU safeguards could temporarily suspend tariff preferences on Mercosur farm imports — Photo: Marcos Oliveira/Agência Senado

Amid mounting pressure from European countries in the final stretch ahead of the signing of the trade agreement between Mercosur and the European Union, Brazil’s Foreign Ministry has received signals that the deal will be approved next Saturday (20).

Despite the optimistic tone, Gisela Padovan, secretary for Latin America and the Caribbean, said the safeguards approved by the European Commission are a source of “concern.”

“The signal is one of confidence [that it will be signed],” the ambassador told reporters on Monday (15). According to her, if there were any “minor delay” in the signing, this would not initially be “a major problem.” “What matters to us is to close out 26 years of negotiations that are important for both sides,” she added.

Padovan said Brazil managed to include important elements in the agreement compared with the 2019 negotiations, especially in the areas of government procurement and intellectual property. “Brazil remains optimistic. We depend on the vote in the [European] Council, but we have signals that the idea is indeed to sign.”

That confidence stems in part from the fact that even if France and Poland oppose the agreement, it would still have a quorum for approval. There are, however, concerns over the safeguards that will be examined on Tuesday (16) by the European Parliament.

In practice, the new safeguards allow for the temporary suspension of tariff preferences on agricultural imports from Mercosur countries if those imports harm European Union producers. “I am familiar with the safeguards issue and I think it is something that deserves concern,” the ambassador said.

President Luiz Inácio Lula da Silva is expected to travel to Foz do Iguaçu on Friday (19) to attend the Mercosur and Associated States Summit the following day. There is also an expectation that the agreement will be signed on that date. It has yet to be confirmed whether the Brazilian president will hold bilateral meetings, as his schedule will be tight.

According to the ambassador, European Commission President Ursula von der Leyen and European Council President António Costa are expected to attend. Mercosur heads of state are also expected to be present.

As reported by Valor, the Brazilian government sees no room for a months-long postponement of the signing of the Mercosur–European Union agreement. The federal administration’s assessment is that if the European Union delays the process until February or March, for example, new obstacles will continue to emerge that could prevent the trade deal from being finalized.

In the view of government sources, in a context of weakening multilateralism, failure to conclude the Mercosur–European Union agreement would send a negative signal, suggesting an inability to reach an understanding between two of the world’s largest economic blocs.

Government interlocutors also say concessions have already been made on agricultural products, especially meat, and that there would be no justification for resistance to the agreement.

*By Sofia Aguiar  — Brasília

Source: Valor International

https://valorinternational.globo.com/

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