Lafico, the Libyan Arab Foreign Investment Company and sovereign fund of Libya, is still studying investment opportunities in Brazil. Representatives of the fund have been to Brazil several times in recent years to analyze partnerships in the production of food in irrigated areas in the Northeast.
According to the Infrastructure and Integrated Development director at the São Francisco and Parnaíba Valley Development Company (Codevasf), Clementino Coelho Souza, the negotiation channel was opened in 2003, during the first trip of president Luiz Inácio Lula da Silva to the Arab world.
“Libya has money and wants to guarantee area for production of food and export. The country is arriving as a potential partner for the development of the model created by the government of Brazil for integration of areas for irrigation,” said Souza.
The director explained that the government of Brazil, through the Codevasf and in partnership with the World Bank, has sought development of a program in which areas on the São Francisco River Basin that are appropriate for irrigation will be confiscated, a concession will be developed and a contract signed with national and foreign companies.
“The government makes a concession contract for 35 years and then transfers it to the private sector. The counterpart of the large groups is promotion of social insertion, guaranteeing training to small-scale farmers,” he said.
According to Souza, companies need to turn 25% of their area to cooperatives and associations of small farmers. “They need to train workers, make technology available and guarantee the sale of production to producers,” he explained.
According to him, Brazil currently has over 1 million hectares on which partnerships may be developed for the production of cotton, flowers and agro energy. Another option, in the area of infrastructure, is the hiring of the company to take care of operation and maintenance of enterprises, as is already taking place with Brazilian highways and railways.
To Souza, Public-Private Partnerships (PPP’s) are the most promising route for deals between Brazilians and Libyans. According to him, Lafico has already established partnerships with companies Andrade Gutierrez and Odebrecht.
“They have been approved in partnership with Odebrecht for a project in Baixo Irecê, in Bahia. The project is being developed and formalized by the World Bank. Now we need to await development,” he explained.
“There are currently possibilities between Brazil and Libya. The partnerships are not yet developing at the speed we would like, but that should take place in future,” he added.
Last year, during a visit to Brazil, the deputy prime minister of Libya, Imbarek Ashamikh, announced that his country planned to invest US$ 500 million in Latin America, especially in Brazilian agribusiness.
Codevasf is a public company connected to the Ministry of National Integration and it promotes the development and revitalization of the São Francisco and Parnaíba river basins with the sustainable use of natural resources and the structuring of productive activities for economic and social inclusion.
The company mobilizes public investment for the construction of infrastructure works, mainly for the implementation of irrigation projects and projects for rational use of water resources. It is recognized mainly for the implementation of irrigation hubs.