The Brazilian press recently reported that the Abu Dhabi Fund for Development (ADFD), a sovereign fund, will fi nance the construction of a multicargo private-use port terminal in the City of Sao Mateus in the state of Espirito Santo.

The project budget would be BRL3 billion (US$789.59 million) and the ADFD would fi nance a high percentage of such a budget, say, 85%.

The Sao Mateus port is held by Petrocity Portos, which was incorporated back in 2013 by a group of foreign and Brazilian investors. A main objective of the project is to allow companies and plants located within a 300 km radius from Sao Mateus to use this new port, focused on the oil and gas sector, rather than the existing, more distant port terminals.

Moreover, the Sao Mateus port will have an off shore quay enabling it to receive large vessels without signifi cant dredging requirements.

The fact that the ADFD is fi nancing such a project is evidence that Brazil, despite economic issues, is (and will certainly remain) a country that att racts foreign investment either as direct investment (in a Brazilian company) or through fi nance. Brazil is the largest economy in Latin America and, with a population of approximately 212 million inhabitants, is a country with a relevant internal market as to the consumption of goods and services.

Considering that the Brazilian press used the expression “to fi nance” the project, one can assume that the ADFD is not participating in the capital stock of Petrocity Portos, but rather extending a loan to the company.

Although Brazil does not have any specifi c regulation related to Islamic fi nance and Brazilian banks usually off er to individuals and legal entities fi nancial products bearing interest, one cannot disregard the possibility of, depending on the case, adopting a Shariah compliant structure like Musharakah especially abroad, because, in any event, the Shariah board of an Islamic institution abroad will review the project from a Shariah perspective.

Este artigo foi publicado no Islamic Finance News, no dia 30 de janeiro de 2019.

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