Engulfed by an acute financial crisis, the state of Rio de Janeiro must privatize many infrastructure companies to balance its budget. And Chinese companies have their eyes on Brazil’s most famous city, according to a report by O Globo.
Chinese state-owned companies have already purchased part of Rio’s International Airport and have celebrated an alliance with Petrobras. Now, they could bid for Cedae, Rio’s sanitation company, for the nuclear energy plant Angra 3, and even for Oi, a telecom that is almost bankrupt.
These new deals could generate 32 billion in revenue.
The movement reflects China’s strategy to internationalize its state-owned companies. Also, Rio assets are in the infrastructure sector – China’s favorite kind of investment. Since those deals are concessions, they offer little risk for investors.
Brazil’s federal government plans to inaugurate the nuclear power plant Angra 3 by 2026. The plant is a perfect example of how corrupt and inept administrations can generate losses of public money.
Since 1984, the plant has already consumed 7bn BRL. It will take another 17bn BRL to finish the project. If the government decides to shut down construction, the bill would also be huge: a total of 12bn BRL to pay for contracted loans.
The construction of the plant was suspended in 2015 due to corruption allegations. Last month, four international consortiums demonstrated interest in taking over the plant.