New debenture guide provides guidance on issuing road and rail bonds.

The document explains the recent rules for issuing incentivized and infrastructure debentures.

The Ministry of Transport has released a debenture guide for states, aiming to provide guidance on the new rules for issuing debentures related to road and rail projects. The document explains the recent rules for issuing incentivized and infrastructure debentures.

Debentures are securities that guarantee the buyer a fixed income. Incentivized debentures were created in 2011 to encourage private financing of infrastructure projects considered priorities by the Federal Government, such as transportation, logistics, sanitation, energy, and telecommunications, for example. Infrastructure debentures, on the other hand, are aimed at supporting the private sector in raising capital in the capital market for project execution.

According to Ronei Glanzmann, CEO of the Infrastructure Movement, Moveinfra, incentivized debentures have been, in recent years, the most important instrument for raising long-term funds to finance national infrastructure and, in the future, waterways. "The market views this manual, which guides states in structuring their incentivized debenture issuances for their projects, very favorably," stated Ronei.

The guide presents changes to the criteria for classifying concession projects and other state-level grants in the road and rail sectors. Adherence to these new guidelines is essential for companies to continue issuing debentures that offer attractive tax incentives.

Promoting sustainability

One of the main new features is the emphasis on environmental and social sustainability. Starting January 26th of next year, companies awarded bids in highway and railway auctions will have to demonstrate investments in sustainable practices linked to their respective projects in order to be able to issue incentivized or infrastructure debentures. Each state agency will be responsible for defining specific criteria for this demonstration.

According to the CEO of Moveinfra, in 2024 more than 135 billion in incentivized debentures were issued in Brazil. "That's already a record amount, and we should break that record; it's very promising. So, this demonstrates the importance of this instrument for financing long-term infrastructure in our country," believes Ronei.

The guide explains that companies will be required to confirm the completion of the works that justify the issuance of debentures. This proof must be provided through a technical statement issued by the state, giving more transparency to the application of resources, as well as protecting investors and ensuring the integrity of the capital market.

The complete guide to debentures for states is available on the Ministry of Transport's website and at this link.