Brazil Launches “Accelerated Growth” Plan to Invest $350 Billion in Infrastructure
On Friday local time, Brazilian President Lula announced the launch of an “accelerated growth plan”, which is expected to invest a total of 1.7 trillion reais (347.47 billion U.S. dollars) in the states to promote infrastructure construction, aiming to promote Brazil’s economic growth and start the green transition.
Dubbed “PAC,” the same name as an investment plan proposed by Lula during his first presidency, it aims to boost investments in energy, logistics, urban and social infrastructure, among other areas. The program was later expanded under his successor, former President Dilma Rousseff. But critics say it has led to excessive spending and exacerbated Brazil’s fiscal crisis while failing to deliver fundamental improvements in infrastructure.
This time, Lula’s government said the plan would follow a path of greater cooperation between the public and private sectors, with spending expected to exceed 1.3 trillion reais by 2026. They said it would pay particular attention to the environmental agenda and campaign promises, prioritizing sustainable economic development.
Lula’s chief of staff Rui Costa said at the launch of the plan that the PAC plan is different from the past, and the state will promote public-private partnerships. He added that the government would take on “fiscal and environmental responsibilities” while taking care of social needs.
According to the Brazilian government, the federal government will invest 371 billion reais, or 22 percent of the total, while state-owned companies such as oil giant Petrobras will inject 343 billion reais. Separately, private sector investments are expected to total R$ 612 billion. The Brazilian government did not elaborate on the financial implications of the plan, nor did it give a specific time frame for the plan.
While the PAC plan includes several projects in the oil and gas sector led by Petrobras, as well as investments in offshore fields, Lula’s team has emphasized its environmental goals and announced an “ecological transition plan”.
Currently, the Lula government is facing pressure to reduce poverty and promote economic growth in underdeveloped areas. He hopes that Petrobras will become the engine of economic growth.
The PAC does not include funding for the paving of the BR-319 highway, which runs through the heart of the Amazon rainforest and which Bolsonaro’s government had planned to restore, which environmentalists have warned would cause irreversible damage.
Brazilian Finance Minister Fernando Haddad said the PAC, part of Brazil’s ecological transition plan, would focus on creating a regulated market for carbon credits, issuing sustainable sovereign bonds, and reformulating a climate fund aimed at reducing emissions. “We will accelerate the nation’s economic growth and help stop the degradation of the planet’s environment.”