Date
6 December 2019
China's President Xi Jinping and Brazil's President Jair Bolsonaro pose for photographers during the BRICS summit in Brasilia on Wednesday. Photo: Reuters
China's President Xi Jinping and Brazil's President Jair Bolsonaro pose for photographers during the BRICS summit in Brasilia on Wednesday. Photo: Reuters

China to make huge investment in Brazil’s Sao Luis port: report

China will make a billion-dollar investment in the Brazilian port of Sao Luis via China Communications Construction Co. Ltd. (CCCC, 01800.HK, 601800.CN), Reuters reports, citing two sources with direct knowledge of the matter.

Speaking on condition of anonymity, the sources said the announcement will be made at the summit of leaders of Brazil, Russia, India, China and South Africa, the so-called BRICS group of emerging nations, who are meeting in the Brazilian capital of Brasilia for a two-day summit.

The deal will be part of the largest foreign direct investment into Brazil this year, one of the sources said, without revealing any figures.

Economy Minister Paulo Guedes said on Wednesday that Brazil is seeking closer integration with China, its largest trading partner, involving not only trade but also investments.

“We had a giant trade agenda, but not so much investment flows. [Now] investment flows are increasing too,” one of the sources said.

A third source said the deal will be a “greenfield” operation, with the Chinese investment aimed at expanding the port and operations. It will not involve the purchase of a local company, but may involve equity stakes changing hands, the source said, also on condition of anonymity.

The cornerstone of the port of Sao Luis was laid in March last year. At the time, China’s state-run news agency Xinhua reported that CCCC led the project with a 51 percent equity stake in the venture, alongside Brazil’s WPR, construction group WTorre, and investment firm Lyon Capital.

Located in the northern state of Maranhao, the port of Sao Luis serves the central, northern and northeastern areas of Brazil, and is connected by the Norte-Sul/Carajas railway. According to one source, CCCC’s investment will include spending on the railway.

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