By Moema Giovanella*

On August 11, the federal government presented and published in the Official Gazette of the Union the third Growth Acceleration Program – PAC, established by Decree 11,632/23, aiming at economic growth in Brazil through the incentive of private investments and increased public investments in the infrastructure sector.

The investments in question will come from various sources of capital, such as: financing from banks and public funds, the General Budget of the Union (OGU), Banco do Brasil and Caixa Econômica Federal, in addition to resources offered by state-owned companies. However, the majority of the investments will come from the private sector.

Compared to previous editions of the program, the new PAC seeks to improve by relying – heavily – on partnerships with the private sector through public-private partnerships (PPPs), given that several projects have been discontinued and halted in recent years.

The projects will also be able to count on credits from public banks, which will be able to finance up to R$440 billion in investments foreseen by the program. However, the program encourages the use of capital markets and private investments – alternative sources to public banks.

Aiming to increase financing instruments, the National Bank for Economic and Social Development (BNDES) intends to launch the Development Credit Letter (LCDs), an alternative way of raising funds on the market with exemption from Income Tax, similar to the benefit of infrastructure debentures.

In a ceremony at the Planalto Palace, on the morning of September 27, President Luiz Inácio Lula da Silva launched the new phase of the Growth Acceleration Program, the New PAC Selections, aimed at state and municipal projects in segments such as health, education and culture.

The New PAC Seleções aims to reduce social and regional inequalities and accelerate the country's economic growth. According to the Brazilian government, the program's actions are strongly linked to growth with social inclusion and environmental sustainability in Brazil.

One of the Program's many objectives is to generate employment and income, with the President stating that hiring for the projects will be done for people from the city itself and the community, generating work, commerce and development.

In addition to including the projects presented at the launch of the PAC in August, PAC Selections has opened calls for selection of new state and municipal projects in areas of importance to the population. The government will invest R$65.2 billion in 27 mobility projects implemented by the Ministries of Health, Education, Sports, Culture, Justice and Cities.

Decree 11.632/23 and the new Growth Acceleration Program represent a solid response to the persistent challenges that Brazil faces in relation to infrastructure. By establishing clear guidelines, promoting sustainability and encouraging collaboration with the private sector, the federal government demonstrates its commitment to accelerating the country’s development.

However, the success of the PAC will depend on effective implementation and transparent management of resources. It is essential that the government remains focused on the established goals and ensures that investments are used efficiently and responsibly. With the support of society, the private sector and all levels of government, Brazil has the opportunity to overcome its infrastructure challenges and promote more robust and sustainable economic growth.

(with the collaboration of Felipe Kang)