Today begins my government, Lula said—everything before was repair.
The program allocates R$60 billion in federal funds over four years, significantly less than previous PAC editions but leverages private sector partnerships through concessions and public-private partnerships. Nine priority areas span sustainable transport (R$349.1B), sustainable cities (R$609.7B), energy transition (R$540.3B), and social inclusion, with emphasis on completing 5,344 stalled projects from previous PACs.
- R$1.7 trillion total investment: R$60 billion federal funds, R$343 billion from state enterprises, R$362 billion in financing, R$612 billion private sector
- 5,344 incomplete projects inherited from previous PACs; 2,688 currently stalled, majority in basic education
- Nine priority areas: sustainable transport (R$349.1B), sustainable cities (R$609.7B), energy transition (R$540.3B), plus water, digital, education, health, defense innovation
- Projected 4 million jobs from infrastructure works; R$44 billion needed to complete all inherited projects
- Program launched August 11, 2023 at Theatro Municipal in Rio de Janeiro with ministers, governors, and ex-president Dilma Rousseff present
Brazil's government launched the Novo PAC infrastructure program with R$1.7 trillion in combined public and private investments over four years, aiming to stimulate economic growth, create 4 million jobs, and advance ecological transition.
On a Friday morning in Rio de Janeiro, President Luiz Inácio Lula da Silva stood in the Theatro Municipal and announced the return of a program that had once defined his political legacy. The Novo PAC—the New Growth Acceleration Program—was back, and with it came a promise to rebuild Brazil's fractured infrastructure while steering the country toward ecological transition. It was, Lula said that day, the true beginning of his third term. Everything before had been repair work.
The numbers were staggering in their scope if modest in their ambition. The government would commit R$60 billion in direct federal spending over four years, but the total package—combining state enterprises, bank financing, and private sector participation through concessions and public-private partnerships—would reach R$1.7 trillion. The strategy reflected a fiscal reality: the state had less money to spend than it once did, so it would have to leverage private capital to make the vision work. The breakdown was telling: R$371 billion from the federal budget, R$343 billion from state companies, R$362 billion in financing, and R$612 billion from the private sector.
The program carved the investment landscape into nine domains. Sustainable transport claimed the largest share at R$349.1 billion, with highways consuming the bulk of that sum. Sustainable cities and resilient urban centers received R$609.7 billion, much of it earmarked for housing through the Minha Casa, Minha Vida program. Energy transition and security drew R$540.3 billion, a figure that revealed the government's balancing act: R$335.1 billion would flow to oil and gas, while R$26.1 billion targeted low-carbon fuels. Water access, digital connectivity, education, health, and defense innovation rounded out the portfolio. Each sector had been subdivided, mapped, and assigned a number.
But the program's true weight lay not in what was new but in what remained unfinished. Brazil's Court of Accounts had documented a national embarrassment: more than 8,600 stalled works across the country, representing nearly 40 percent of all federally funded contracts. Among the inherited projects from the first two PACs, 5,344 remained incomplete. Of those, 2,656 were still under way while 2,688 had simply stopped. The majority—2,171 projects—were in basic education. Completing them all would require R$44 billion. The new program would have to absorb these failures while pushing forward.
Rui Costa, the chief of the Civil House and the architect of the program's reconstruction, framed the moment in historical terms. The years since 2016, he said, had brought economic stagnation, recession, unemployment, inflation, and a collapse of Brazil's international credibility. The federal pact between national and local governments had been shattered. The new PAC, he insisted, would respect that pact regardless of political affiliation. Resources would flow to allies and adversaries alike, determined by merit and need rather than partisan loyalty.
The government projected that the works would generate approximately four million jobs and elevate Brazil's growth potential. But the challenges were substantial. Fiscal constraints would demand ruthless efficiency in resource allocation. Environmental approvals would be required for thousands of projects, and the world was watching Brazil's environmental record closely. The government had promised that this version of the PAC would be greener than its predecessors—emphasizing sustainable materials in construction, low-emission fuels, waste management, and basin revitalization. Some officials saw the program as a shop window for the world, a demonstration that Brazil could develop sustainably and attract international capital to that vision.
The program would unfold in phases. The first would focus on restarting stalled projects and accelerating those already underway, drawing from proposals submitted by ministries and state governments. A second phase would open to competitive bidding from municipalities and states. Whether this new iteration would escape the pattern of delays and abandonment that had plagued its predecessors remained an open question. The fiscal framework being debated in Congress included guardrails: investment spending could not fall below 0.6 percent of GDP, and if the government ran a primary surplus beyond its target, it could redirect up to 70 percent of the excess toward unfinished or ongoing works. The rules were in place. The money was committed. Now came the harder part: execution.
Notable Quotes
Today begins my government. Until now, we have been repairing what had fallen apart. We have already recovered 42 social inclusion policies. The PAC is the beginning of our third term.— President Luiz Inácio Lula da Silva
The Novo PAC is much more than a public investment portfolio—it is a collective commitment born from broad federative dialogue and conversation with governors and mayors, so that chosen projects reflect the aspirations of populations in each region.— President Luiz Inácio Lula da Silva
The Hearth Conversation Another angle on the story
Why does a program that's supposed to stimulate growth rely so heavily on private capital when the government controls the budget?
Because the government doesn't have the fiscal room it once did. Lula's administration is trying to hit zero primary deficit by 2024. That constraint is real. So the strategy is to use public money as a lever—R$60 billion in federal funds to attract R$612 billion from the private sector. It's a bet that private investors will see profit in infrastructure.
But doesn't that shift risk onto the public? If a private company builds a highway and it doesn't generate the revenue they expected, who absorbs the loss?
That's the tension at the heart of it. Public-private partnerships are supposed to be structured so both sides share risk proportionally. But the history here is messy. Brazil has had trouble with these arrangements before. The real test is whether the government can enforce contracts and whether the projects are actually viable.
What about those 5,344 incomplete projects? Why haven't they been finished?
Poor planning, mostly. The Court of Accounts says that's the main culprit. Projects get started without clear timelines or adequate funding. Then political priorities shift, budgets get cut, and work stops. You end up with half-built schools and water systems that never reach completion. The new PAC has to break that cycle.
Is there a chance this just becomes another list of promises that don't materialize?
It's possible. The government knows this. That's why Lula said today that ministers would have to execute what was approved, not just have ideas. There's also a new fiscal framework that sets minimum investment spending at 0.6 percent of GDP. The rules are tighter. But rules only matter if they're enforced.
What's the environmental piece really about? Is it genuine or political cover?
Probably both. The government faces international pressure on deforestation and climate commitments. But there's also genuine investment in low-carbon fuels, waste management, and sustainable construction. The question is scale. R$26.1 billion for low-carbon fuels sounds significant until you remember R$335.1 billion is going to oil and gas. The priorities are mixed.
Four million jobs—is that realistic?
It depends on execution and what you count as a job. If you're talking about direct employment on construction sites, that's plausible. If you're counting indirect jobs in supply chains and services, the multiplier could be larger. But it also depends on whether projects actually get built and stay built. A stalled project creates no jobs.