China reportedly wants to invest in Brazilian port project

The deal will be part of the largest foreign direct investment into Brazil this year.

    China is planning to invest in the expansion of the port in San Luis, Brazil, according to a source quoted by Reuters [File: Gustavo Bonato /Reuters]
    China is planning to invest in the expansion of the port in San Luis, Brazil, according to a source quoted by Reuters [File: Gustavo Bonato /Reuters]

    China will make a billion-dollar investment in the Brazilian port of Sao Luis via China Communications Construction Company (CCCC), two sources with direct knowledge of the matter told the Reuters news agency.

    Speaking on condition of anonymity, the sources said the announcement will be made at the summit of leaders of Brazil, Russia, India, China and South Africa, the so-called BRICS group of emerging nations, who are meeting in the Brazilian capital for a two-day summit.

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    The deal will be part of the largest foreign direct investment into Brazil this year, one of the sources said, without revealing any figures.

    Economy Minister Paulo Guedes said on Wednesday that Brazil is seeking closer integration with China, its largest trading partner, involving not only trade but also investments.

    "We had a giant trade agenda, but not so much investment flows. (Now) investment flows are increasing too," one of the sources said.

    A third source said the deal will be a "greenfield" operation, meaning there had not been any construction carried out at the site before. The Chinese investment is aimed at expanding the port and operations. It will not involve the buying of a local company, but may involve equity stakes changing hands, the source said, also on condition of anonymity.

    The cornerstone of the port of Sao Luis was laid in March last year. At the time, China's state-run news agency Xinhua reported that CCCC led the project with a 51 percent equity stake in the venture, alongside Brazil's WPR, construction group WTorre, and investment firm Lyon Capital.

    Located in the northern state of Maranhao, the port of Sao Luis serves the central, northern and northeastern areas of Brazil, and is connected by the Norte-Sul/Carajas railway. According to one source, CCCC's investment will include spending on the railway.

    SOURCE: Reuters news agency