Mar 12, 2021

 The Brazilian Development Bank (BNDES) began, on Tuesday, the 15th, the studies for structuring the Public-Private Partnership project (PPP) for the construction and operation of a penal complex in Erechim (RS) and another in Blumenau (SC).

The project of this PPP has the potential to be replicated in other parts of the country, becoming the reference for a new standard, since, in addition to promoting the reintegration of the prisoner into the labor market and contributing to accelerating the reincorporation of these individuals in society, the initiative also seeks alternatives to optimize public spending in the prison system.

“BNDES is modeling this pilot initiative in the states of Rio Grande do Sul and Santa Catarina but the goal is achieving nationwide impact, in partnership with the Ministry of Justice,” explains BNDES’s President, Gustavo Montezano. “The goal is to learn and experience something that can change the prison and prison sector in Brazil, remembering that we are not only talking about security, but also of an important social issue, because recovering prisoners is the best way to ensure that they do not return to prison.” 

The new Erechim complex will have a capacity of up to 1,125 male prisoners and Blumenau’s will be able to receive more than 3,000 inmates. The investments planned for this project, in the first five years, are R$ 70 million for Rio Grande do Sul’s complex and R$ 160 million for the Santa Catarina one.

The governor of Santa Catarina, Carlos Moisés, is excited about this PPP project. “This is the path that will ease the demands for investments made by the State in the sector, and make it work with a subject that is peculiar to it, that is, the management of the custody process of the prisoner,” he said.

Eduardo Leite, governor of Rio Grande do Sul, is also enthusiastic about the possibilities of the project, since it combines the financing capacity and efficiency of the private sector with the government’s leading role in public policy. “That is why I believe that what we’re building here is going to deliver very important results and that, in fact, they’re going to end up being a pilot of something bigger that extends to other projects in this area and to other states,” Leite said. 

The beginning of the studies marks the inauguration of work for the structuring of PPPs in the security sector in the country, a policy that was qualified by the Council of the Investment Partnerships Program (PPI) at the initiative of the Ministry of Justice and Public Security, and consolidated with the publication of Decree No. 10,106/2019. “This is a fundamental public policy to reduce this cycle of violence, and it certainly involves addressing the issue of resocialization and opportunity in our prisons,” said Martha Seillier, special secretary of PPI.

The studies initiated today will be conducted with the support of a consortium contracted by BNDES and led by PwC and will also have the support of consultants hired by the Inter-American Development Bank (IDB), including IMG Rebel, based in the Netherlands and with international experience in prison PPPs; and the law firm Manesco, Ramires, Perez, Azevedo Marques – Sociedade de Advogados, which participated in the structuring of several successful Brazilian concessions and PPPs.

IDB’s participation in the project is the result of a technical cooperation agreement signed with BNDES for the structuring of PPPs, which aims to increase the availability of infrastructure and enable better management of prisons in the states.

“We at IDB are convinced that PPPs can help Brazilian states and the federal government to overcome a number of important challenges in this area,” said Morgan Doyle, the institution’s representative in the country. “Our experience here in Brazil and in neighboring countries shows that (PPPs) are a really efficient mechanism to improve the management of public assets and services, provided that coordinated correctly,” he emphasized. 

The importance of the agreement with IDB is due to the institution’s high credibility and experience in the public security sector and in the structuring of PPPs in Brazil. The agreement also brings the opportunity to aggregate the knowledge of experts and international experiences, allowing the evaluation and selection of the current best practices on a global scale.

The agreement was established in the context of the Memorandum of Understanding signed in October 2019 between BNDES, IDB and the Federal Government, through the Ministry of Justice and Public Security, aiming to promote programs and projects that contribute to boost effective and innovative investments aimed at improving public security in Brazil.

About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government for the long-term financing of the Brazilian economy. Its actions focus on socio-environmental and economic impacts in Brazil. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport. In crisis situations, BNDES acts in an anticyclical manner and assists in formulating solutions for resuming economic growth.

About PPI — PPI works to expand and strengthen the interaction between the State and the private sector, through the celebration of partnership contracts for the execution of public infrastructure projects and other privatization measures. Since 2019, the program has been working with states and municipalities, providing technical, financial and institutional assistance to produce feasibility studies, proposals for regulatory improvements and attracting investors. The structuring of state and municipal concession projects is funded by BNDES, with subsequent reimbursement by future operators.

About IDB — The Inter-American Development Bank is dedicated to improving lives. Established in 1959, IDB is an important source of long-term financing for the economic, social and institutional development of Latin America and the Caribbean. IDB also conducts cutting-edge research and provides policy advice, technical assistance, and training for clients in the region’s public and private sectors. IDB is also historically the main international creditor of BNDES, with whom 22 contracts have been made so far, totaling about US$ 8.75 billion. BNDES and IDB hold a series of initiatives underway in different areas, notably in the preparation of projects in the sectors of public security, solid waste, health, sanitation, and support to micro-, small- and medium-sized enterprises (MSMEs) and social infrastructure actions.