Senate Committee approves Bill of Infrastructure Debentures

The text creates infrastructure debentures, which are debt securities that companies in the sector can issue to seek funding from investors. They work as a financing alternative to promote works on highways, railways, ports and airports, for example.

Rapporteur of the bill, Senator Confúcio Moura (MDB-RO) gave a favorable opinion to the text because he believes that the public power does not have the cash to make the investments in infrastructure that Brazil needs.

“Despite the excellent performance of debentures incentivized in raising private funds in long-term operations, the needs for infrastructure development in Brazil and the chronic inability of the State to provide funds for these initiatives make it imperative to attract new sources of funds. infrastructure debentures will therefore have the role of expanding the funding long-term private equity by creating incentives for the participation of institutional investors, especially pension funds.”

If the project receives the green light from the Senate, the infrastructure debentures will be added to the incentivized debentures as tools to attract private capital to the sector.

Incentivized debentures receive this name because the government does not charge Income Tax (IR) on the profit that individuals earn by investing in infrastructure bonds issued by the private sector. For corporate investors, there is a charge of 15% income tax on profits, which is still lower than what the law establishes for other investments.

According to the Brazilian Association of Financial and Capital Market Entities (Anbima), the issuance of incentivized debentures has been growing over the last few years. In 2013, R$1.7 billion was raised. In 2022, the amount reached BRL 39.5 billion. Between 2012 and last year, the mechanism managed to attract R$ 190 billion in resources.

Targeting

Defenders of the PL of Infrastructure Debentures argue that the proposal is necessary to attract investment from sectors that, today, have no benefit in buying incentivized debentures, for example. This is the case of private pension institutions and insurance companies, according to Senator Confúcio Moura.

To win these investments, the PL directs tax incentives to companies that issue debentures and not to investors. The proposal allows companies to deduct 30% of the interest paid to investors (those who buy the securities) from the IR and Social Contribution on Net Income (CSLL) calculation basis. In practice, they would pay less taxes to the government.

As a result, these companies are expected to offer higher interest rates as a reward for investors who buy the debentures.

Infrastructure: incentivized debenture issues reach BRL 40 billion in 2022