IFC Advises São Paulo State on Structuring the Concession of Nova Raposo and Rota Sorocabana Lots

São Paulo, November 29,  2024 – EcoRodovias has won the auction bid for the concession of the Nova Raposo Lot, following a competitive bidding process held on November 28 at B3, the São Paulo Stock Exchange. Together with the concession for Rota Sorocabana that was secured by CCR Rodovias on October 30, the state of São Paulo now has two new concessions, replacing the current ViaOeste, whose contract ends in March 2025. 

IFC, a member of the World Bank Group, supported the Government of the State of São Paulo in the structuring and implementation of the two lots, as part of a mandate signed in 2022 covering the concession of five additional highway lots operated by the Department of Roads and Highways (DER, abbreviation in Portuguese) in the region by 2026.

IFC's advisory services to the São Paulo Government included the preparation of technical studies (engineering, traffic analysis, and road safety), legal, environmental, social and governance (ESG), and economic-financial studies, as well as the preparation of bidding documents and the promotion of the project. This concession includes high safety standards, with the mandatory adoption of the iRap  (International Road Assessment Programme) methodology – which  assesses the level of traffic risks on roads and suggests improvements – climate risk management mechanisms, and a zero-carbon program.

The concession of the Nova Raposo and Rota Sorocabana lots foresees investments of BRL 16.8 billion over the next 30 years – BRL 8.0 billion in Nova Raposo and BRL 8.8 billion in Rota Sorocabana. It also includes the reduction of tolls tariffs charged on the current sections operated by ViaOeste and the inclusion of capacity expansion works and improvements to increase safety and reduce accidents. Together, the new concessions are expected to generate more than 18,500 direct and indirect jobs.

Private sector resources will be applied to capacity expansion works, road improvements, and the conservation and maintenance of the segments. The concession includes investments for the development of a new duplicated route connecting Castello Branco, Raposo Tavares, and BR-116, and the requalification of Raposo Tavares in the connection between Cotia and São Paulo, allowing greater fluidity and reduction of congestion in the region.

Roads will also feature a 100% automatic toll payment system (free flow) and a fairer toll collection that approximates the toll charged to the section actually traveled by the user. The toll collection will be carried out through free flow gantries, a technology that improves road fluidity and allows for shorter section toll collection, making it more proportional to the traveled route. Drivers who use the roads as part of their daily routine will benefit from the Frequent User Discount (DUF), which will allow a reduction of up to 20% of the current kilometer toll, in the case of Nova Raposo.

This mandate is part of a partnership between IFC and the Government of the State of São Paulo  to structure highway concessions, which was initiated in 2016 and has already resulted in five successful concessions – Mid-West Lot, Road of the Shoes Industry, Piracicaba-Panorama (PiPa) Lot, North Beltway and São Paulo Coast Roads – with more than $ 6 billion in expected investments.

Bernardo Tavares de Almeida, Head of PPP Advisory at IFC in Brazil, said that with this project, IFC seeks to improve infrastructure in Brazil, providing credibility and transparency, attractive returns, and adequate risk allocation for investors. "The concessions of the Rota Sorocabana and Nova Raposo lots significantly contribute to the development of infrastructure in the State of São Paulo, including new road sections that will receive important investments to become safer. The benefit comes to users and the population as a whole.

The project was structured by IFC with financial support from the Global Infrastructure Facility (GIF), a global collaboration platform that integrates efforts to boost private investments in emerging markets, and PSPInfra, a partnership between the National Bank for Economic and Social Development (BNDES), the Inter-American Development Bank (IDB), and the International Finance Corporation (IFC), to improve the provision of public services in Brazil through the development of infrastructure with private sector participation. The  project structuring is the responsibility of CPP – Companhia Paulista de Parcerias, the State of SP Investment Partnerships Secretariat, and ARTESP.

IFC has been investing in the Brazilian private sector since 1957 to address the country's main development challenges, including social inclusion, competitiveness and productivity, and climate.