Brazil is one of the most attractive markets for infrastructure in the World today thanks to favourable macroeconomics, a competitive infrastructure sector developing fast and a pipeline with specific projects close to be a reality. At the macro-economic level: aprox. 4% stable projected GDP growth, an increasing population (close to 200 millions people today), being one of the main recipient of forign direct investment worldwide and a rapidly increasing motorization rate, shape a bright future in the short and long term Brazil is moving forward in Public Private Partnerships, with a lot of projects in railways, roads and ports. There are local and international players and a stable legal framework allowing an increasing number of projects being tendered. The government Accelerated Growth prgram (PAC) is making progresses despite a slow start. Current expectations are high, with investments of more than US$500 billons planned in the period 2011-14 Opportunities for investment in infrastructure in Brazil exist mainly in roads, railways, aiports, stadiums and energy. The fact that Brazil will host the two premier world sports events, FIFA World Cup 2014 (12 host cities) and Rio Olympic Games 2016 is pushing all this infrastructure development. Brazil is a relevant market for any global player in infrastructure. Are you going to miss it?

1. Investing in infrastructure
in Brazil
Market research
September 2010

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3. Content
• Macro-economics: Brazil, an attractive
country
• The infrastructure sector in Brazil: an overall
perspective
• Specific investment opportunities in
infrastructure
2

4. GDP: a growth economy
REAL GDP growth at 2009 prices and 2008-2050 forecast
Percentage
India 5,8%
China 4,7%
USA 2,4%
Brazilian Real
crisis and 6,1
5,7
Lula´s election 5,1
4,3 4,0 3,8
3,2
2,7
1,3 1,1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 -
2050
Brazil´s growth story is forecasted to continue at a solid pace
´
Source: Banco Central do Brasil; PWC 3

5. Population: the key to sustained
competitiveness
Brazil: population 5th most populated country
Millions of inhabitants in 2008 and 2050
215
183 190
171
159
147
1990 1995 2000 2005 2008 E 2050
One of the main advantages of the Brazilian economy is the high
availability of labor resources which is predicted to remain stable in
the coming decades
Source: IBGE (Instituto Brasileiro de Geografia e Estatistica), United Nations 4

6. Brazil is one of the main FDI destination
AT Kearney 2010 FDI Confidence Index®
Values calculated on a 0 to 3 scale
Vs ranking
Low confidence High confidence 2009
China 1,93 = •Brazil´s
´
USA 1,67 economy is one
of the main
India 1,64 recipient of
Brazil 1,53 foreign direct
investment (FDI)
Germany 1,43 •Lately, the
Poland 1,35 45 Bi. US$ improvements in
inward inflow institutional
Australia 1,33 credibility and
in 2008
Mexico 1,32
regulatory
framework are
Canada 1,32 helping to
UK
increase FDI
1,32
Source: AT Kearney; United Nations 5

7. Motorization rate: strongly increasing
Evolution of the motorization rate 2000-09 59 Millions of vehicles
Vehicles per 1.000 inhabitants (x2 in 2000-09)
285 311
262
243
216 228
196 207
174 185
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Strong increase in the motorization rate in the last decade,
showing the fast modernization of the country
Source: DENATRAN (Departamento Nacional de Transito; Ministerio das Cidades); IBGE; Infra-k analysis 6

8. Brazil is a serious economic power
Comparison of BRICs countries
Brazil Russia China India
• 190 millions • 142 millions • 1,328 millions • 1,148 millions
Population* • 1.4% growth • 0.4% growth • 0.6% growth • 1.7% growth
rate rate rate rate
• 1,981 bi. USD • 2,260 bi. USD • 8,148 bi. USD • 3,357 bi. USD
• 10,325 USD • 15,937 USD • 6,136 USD per • 2,924 USD per
GDP** per capita per capita capita capita
• 5.8% growth • 9.2% growth • 13.4% growth • 10.2% growth
• Imports / • Imports / • Imports / • Imports /
Trade balance exports: 223 / exports: 369 / exports: 1,233 exports: 372 /
226 bi. USD 523 bi. USD / 1,580 bi. USD 294 bi. USD
• 45 billion • 70 billion • 138 billion • 41 billion
FDI USD in 2008 USD in 2008 USD in 2008 USD in 2008
Brazil, as one of the largest of the world´s developing economies, will play a
´
relevant role in the global economy
* Population in 2008; growth rate in the period 1998-2008
** Nominal GDP in billion USD at PPP; GDP per capita in USD at PPP; GDP annual growth in the period 1998-2008 in USD at PPP
7
Source: KPMG and Infra-k analysis

9. Content
• Macro-economics: Brazil, an attractive
country
• The infrastructure sector in Brazil: an
overall perspective
• Specific investment opportunities in
infrastructure
8

10. Brazil is moving forward in PPPs (1/2)
High Stage 3
UK
Australia Market
development
curve
Ireland
Stage 2 Netherlands Spain
Sophistication Italy France
New Zealand Canada
US
Greece Japan
Portugal Germany
Stage 1 Belgium South Africa
China Hungary Denmark
Mexico
India Czech Republic Finland
Slovakia Bulgaria Brazil
Latvia Croatia Poland
Russia Albania
Low
Low Activity High
Brazil is still in the Stage 1 but remains as one of the countries with the
most activity at this stage
9
Source: Deloitte

11. Brazil is moving forward in PPPs (2/2)
Selection of some countries at different stage of development of PPPs
Health&Hospitals
LEGEND
Sports&Leisure
Heavy Railway
accomodation
Light Railway
0 Discussions ongoing
Wastewater
1 Projects in procurement
Defence
Housing
Schools
2 Many procured projects,
Airports
Central
Water&
Prisons
Roads
some projects closed
Ports
3 Substantial number of closed
Country
IT
projects
4 Substantial number of closed
projects, majority of them in
UK 4 4 4 4 4 4 4 4 4 4 4 4 4 4 operations
Australia 1 4 1 1 2 2 4 3 3 1 4 1 2 3
Spain 1 1 - - 2 - 4 1 0 1 4 0 0 3
Canada 1 - - - 2 - - 0 - 1 2 1 1 1
Mexico - 1 - - 1 - - 0 - 1 1 1 - 0
Brazil - 0 - - - - 2 - 1 0 3 - 0 0
Brazil has made progresses in PPPs, specially in railways,
roads and ports, but there is still room for improvement
10
Source: PWC and Infra-k analysis

12. Forecasted investments in infrastructure
Forecasted investments in infrastructure
Brazilian R$ Billions
274
14
+37%
33
199 29 • Investments in basic
Ports 5 infrastructure are
Roads 23 expected to soar:
39
Railways 16
−Ports: +203%
Sanitation 22
67 −Roads: +45%
Telecom 66
−Railways: +82%
−Sanitation: +77%
92
Energy 68
2005-2009 2010-2013
11
Source: APE/BNDES; GT Investimento

13. PAC: Government Accelerated Growth
Programme (1/2)
Expectations for PAC1 2007-09 Projects completed under PAC1 2007-09
Social and
Transportation urban Transportation
12%
16%
34%
Total Total
R$504 Bi. R$257 Bi. 56% Social and
28%
urban
Energy 45% Energy
Expectations for PAC1 were quite high but the real execution of projects
has been well below the targets
12
Source: Financial Times; Federal Government/Contas Abertas; National Treasury; Ministry of Finance

14. PAC: Government Accelerated Growth
Programme (2/2) Transportation
Energy
Social and urban
Expectations for PAC2 2011-14
Logistics
Railways Project1
Highways Health, education
1,3%
4,6% 6,8% Subsidized home
Other energy 5,0% 4,7% loan programme
4,1%
7,5%
Urbanisation
3,2% of favelas Expectations for
Total PAC2 are much
R$959 Bi. more aggressive
Oil and natural 29,8%
gas 18,4%
Mortgage
finance
14,6%
Electricity
infrastructure
13
Source: Financial Times; Federal Government/Contas Abertas; National Treasury; Ministry of Finance

15. Infrastructure finance perspectives
Main institutions Infrastructure financing role
•BNDES •BNDES (National development bank)
State-owned •Banco do Brasil is the main provider of long term
banks •Caixa Economica financing for any infra project
Federal
•Itaú Unibanco •Limited participation so far (co-
Private •Santander financing with BNDES)
banks •Bradesco •Market starting to develop
•Axxon •First infra funds launched
Private
•Carlyle •Equity financing plays a very
equity
•Santander important role
houses
•Franklin Templeton
Capital markets (both equity and debt) are at a very incipient stage, but
they are starting to grow given the huge amount of capital needed to
fund the large pipeline of projects
14
Source: Infra-k analysis

16. Content
• Macro-economics: Brazil, an attractive
country
• The infrastructure sector in Brazil: an overall
perspective
• Specific investment opportunities in
infrastructure
15

17. Attractiveness of the different
infrastructure sub-sectors
Types of projects Main players Key success factors
• Few PPP projects • International operators • Select the right business
opportunity and be a partner
Airports
to Infraero
• Very large PPP opportunities • Large consortia of specailized • Local partners selection
operators and OEMs with
Railways local construction companies
• Few PPP projects but • Local and international • Tender bidding skills
Roads
profitable and already specialized operators • M&A capabilities to acquiere
developed model current operators
• Many projects but profitable • Local construction and real • Find a profitable business
model still to be defined estate players model
Stadiums
• Few and large projects in • Local and international • Local partners selection
generation specialized players
Energy
• PPP opportunities in
trasnmission
16

18. Main investment opportunities (1/2)
Estimated
investment
Project R$ Millions
• Passeger terminal expansion of the Confins international airport in Belo Horizonte (MG) • 216
• Passenger Terminal 3 and runways in Sao Paulo international airport / Guarulhos (SP) • 1,370
• New traffic control tower and passenger terminal in Sao Paulo airport / Congonhas (SP) • 300
• Expansion of Rio de Janeiro international airport / Galeao (RJ) • 688
Airports
• Runway expansion in Porto Alegre international airport • 122
• Passenger terminal expansion in Brasilia international airport (DF) • 439
• Passenger terminal expansion and new runway in Manaus international airport (AM) • 794
• Passenger terminal expansion in Fortaleza international airport (CE) • 525
• High speed railway Sao Paulo - Rio de Janeiro • 34,600
• Airport Express Railway from Sao Paulo downtown to SP Intl. Airport / Guarulhos (SP) • 1,440
• Rio de Janeiro subway (RJ) • 1,150
• Curitiba subway (PR) • 2,000
• Centralized system of fees collection in Sao Paulo metropolitan area (smart card) (SP) • 220
Railways • Transcatarinense railway (SC) • 1,000
• South SP Railway ring (Ferroanel Sul) (SP) • 333
• Litoranea railway (SC) • 954
• North-South railway – 2,258 km on North and Central region • 6,400
• Transnordetina railway – 1,728 km of railways on Northeast region • 4,500
• Rodoanel Sao Paulo (SP ringroad) – East part (SP) • 1,750
• Rodoanel Sao Paulo (SP ringroad) – North part (SP) • 1,600
• ERS 010. Progresso highway. Porto Alegre (RG) • 4,500
Roads
• Federal roadways concession program: BR-116 Minas Gerais, BR-381 Belo Horizonte, • N.A.
BR-040 Brasilia
• Road privatization in Minas Gerais. 13 packages (MG) • N.A.
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19. Main investment opportunities (2/2)
Estimated
investment
Project R$ Millions
• Mané Garrincha Stadium – Brasilia (DF) • 600
• Verdao stadium – Cuiabá (MT) • 430
• Arena da baixada Stadium – Curitiba (PR) • 138
• Castelao Stadium – Fortaleza (CE) • 400
• Vivaldao Stadium – Manaus (AM) • 580
FIFA World • Dunas Stadium – Natal (RN) • 301
Cup • Beira Rio Stadium – Porto Alegre (RS) • 130
stadiums • Arena Sao Lourenço – Recife (PE) • 500
• Maracaná Stadium – Rio de Janeiro (RJ) • 430
• Fonte Nova Stadium – Salvador (BA) • 550
• Morumbi Stadium – Sao Paulo (SP) • 250
• Joaquim Americo Guimaraes Stadium – Curitiba (PR) • 204
• Santo Antonio hydroelectric power plant – 1st plant of the Madeira complex (3,150 MW) • 5,200
• Jirau hydroelectric power plant – 2nd plant of the Madeira complex (3,300 MW) • 5,000
• Belo monte hydroelectric power plant (5,681 MW) • 3,000
Energy • Angra 3 nuclear power plant (11,181 MW) • 7,000
• Madeira transmission system • 521
• Interconnection North-Northeast • 279
• Sao Paulo water and sewage company expansion – PPP projects • N.A.
• Santa Catarina Logistics hub (several ports) • 400
• Multimodal Tiete Paraná hydroway (alcohol pipeline) • 1,400
Other • 262
• Datacenter for Banco do Brasil and Caixa Economica Federal – Brasilia (DF)
projects • 4,560
• Porto Maravilha project (RJ)
• Canoas Prison Complex • 2,800
• Petrolina irrigation project • 474
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20. FIFA 2014 and Rio Olympics 2016 impact
FIFA World Cup 2014 Rio Olympics Games 2016
• Projects coordinated by each of the • The project is coordinated by
12 host cities states & municipal Federal, State and City
governments governments as well as by the
• Federal government involved in Brazilian Olympic Committee
major infrastructure areas through the Rio 2016 Organizing
• Investments to build and reform Committee but most of the efforts
stadiums around US$5.7 billions and decision power concentrated at
• Estimated number of tourists during the City level
the event: 500,000 • 11 permanent and 4 temporary
• Commercial air traffic should double installations to be built
until 2014 • A bus rapid transport system to be
• Large investments in hotels, ports implemented as well as a
and airports modernisation of the subway
• Regeneration of Rio´s historic port
area
• +15% increase in tourism expected
Brazil will host the world´s 2 premier sporting events in a time span of 2
´
years
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