Libyan Arab Foreign Investment Company seeking investment in Brazil agriculture projects

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Invest in Brazil | 1 July 2010

(Brazil July, 1, 2010) The Libyan Arab Foreign Investment Company, Lafico, (a sovereign Libyan fund), reported that it is currently seeking investment opportunities in Brazil. The fund’s envoys have made previous investment study visits to the country, analyzing partnerships in the production of food in irrigated areas in the North East of the country.

The director, infrastructure and Integrated Development director for Sao Francisco and Parnaiba Valley Development Company (Codevasf), Clementino Coelho Souza said the investment partnership talks were started in 2003 when the outgoing Brazilian President, Luiz Inacio Lula da Silva made his first trip to the Arab world. Souza acknowledged that Libya has ready investment funds and is seeking area for production and export of food. The FDI projects partnership between Brazil and Libya would help develop the government’s model for integration of irrigation areas, said Souza.

Libya remains a potential partner in this quest, in which the Brazilian government via Codevasf, together with the World Bank, is seeking a development program that will develop areas of the Sao Francisco River Basin that are appropriate for irrigation, with the development of a concession and a contracts to be signed with national and interested foreign companies.

This would subsequently bring in massive FDI in food production, with the Brazilian government expected to make a concession contract for 35 years and then transfer it to the private sector. On the overall, the large groups will be responsible for promotion of social insertion, guaranteeing training to small scale farmers in the areas, he said.

According to Souza, the companies will need to turn about 25% of their areas to cooperatives and associations of small scale farmers, in addition to training workers, availing technology and guaranteeing the sale of production to producers.

Currently, Brazil has more than 1 million hectares that can be used to develop partnerships for the production of cotton, flowers and agro energy with the right investments. Souza said that he believed, for the FDI partnerships to be successful, Public-Private Partnerships (PPP’s) will come in handy for such deals between Libya and Brazil.

Currently, Lafico is already in partnerships with companies such as Andrade Gutierrez and Odebrecht, with an approved project with Odebrecht in Baixo Irece, Bahia, being developed and formalized by the World Bank. 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 Brazilian public company that mobilizes public investment in Brazil for the construction of infrastructure works and implementation of irrigation projects.
Original source: Invest Brazil
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