Last summer, Roberto Jefferson, a lawmaker for the Brazilian Labour Party (PTB) in the lower house of Brazil’s parliament, claimed that he had received unreported campaign funds from the PTB, and that the party bribed lawmakers in exchange for their votes on legislation that the government was supporting (although he said the president knew nothing of the alleged scheme).

A subsequent congressional investigation revealed that millions of dollars flowed to various legislators from two bank accounts held by a PTB supporter. However, no conclusive evidence of a quid-pro-quo vote-buying arrangement has been found.

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Aside from this, the foreign investment environment in Brazil is “extremely healthy”, said Bruno Soares, an attorney at New York law firm Chadbourne & Parke, which deals with project finance mandates in Brazil.

US-based aluminum giant Alcoa is planning to invest $1.6bn in Brazil over the next three years. Projects to be undertaken include an expansion of the Alumar Alumina Refinery, located in the city of Sao Luis in the northern Brazilian state of Maranhao, supported by Anglo-Australian miner BHP Billiton and Canada’s Alcan to the tune of $518m and $129m, respectively; the creation of a bauxite mine in Juruti, in the northern state of Pará; and, in the state of Minas Gerais, modernisation of the Poços de Caldas aluminum smelter.

“Brazil has never been more attractive to foreign investors,” Guido Mantega, former president of Brazil’s Banco Nacional de Desenvolvimiento Economico e Social (BNDES) and now finance minister, told fDi. “The fundamentals of Brazil are solid, and in this election year we are in a comfortable position.”

BNDES has announced its intention to offer two major new hydroelectric project concessions in the first half of 2006. Located on the Madeira river in Brazil’s Rondonia state, the Santo Antonio and Jirau projects, as they are known, will generate of 6400 megawatts of power and represent nearly $9bn in investment.

BNDES has also said it would lend state oil giant Petrobras $896m to help finance the construction of three offshore oil and gas production units, in an effort to help boost the company’s output in the Campos Basin region, off Brazil’s south-eastern coast.

India’s State Oil and Natural Gas Corp (ONGC) announced that it would be paying $1.4bn to acquire ExxonMobil’s 30% stake in an oil block in

the Campos Basin.

It is estimated that the BC-10 block holds 400 million barrels of oil reserves and is valued at $820m, including a payment of $330m to buy ExxonMobil’s Brazilian subsidiary and $490m in cash calls for costs, appraisal and further exploration. The move was widely viewed as apiece with ONGC’s efforts to obtain energy assets overseas to help fuel India’s robust economy.

Petrobras has also declared that the Basin region’s Papa-Terra field in the BC-20 offshore block is commercially feasible.

Michael Deibert