Unlike previous growth cycles in Brazil, the new one that will complete the Real stabilization plan can no longer count on the state as the main financier and undertaker of the infrastructure investments. This represents a world trend, that originated the project finance, a way to finance heavy investments designed to make possible the private/public partnership. The project finance separates the firm risk from the business risk, and designs finance arrangements that are specific to each investment project. In Brazil, now that the law that regulates concessions to the private sector has been enacted and the privatization program has been accelerated, the project finance will probably constitute the main finance procedure for infrastructure investments. For the project finance to work, the regulatory environment should be clear and the contracts should be credible, preventing the public sector to be put into a comer, forced to bail out insolvent projects. A new proposal for the BNDES system — an insurance against the macroeconomic risk in credit operations —is laid out. This proposal aims at building a long term credit market in Brazil

Revista de Economia Política 1996

v. 16, n. 3(63)