Brazil is about to enter a new era as it begins the process of winding down its state-run power utility.
The country has been grappling with the crisis of electricity prices since a devastating gas explosion in March 2011 killed more than 700 people, sparking protests that forced President Michel Temer to resign and force Rousseff to step down.
The country will soon turn to a new generation of investors who will buy electricity from new renewable sources, but the government is wary of their impact on the economy.
And it’s still unclear if they will help reduce the country’s soaring debts, which the World Bank says will exceed $10 trillion by the end of the decade.
“The new generation is still very young,” Paulo Gonçalves, head of the government’s International Finance Authority (IFA), told reporters at a news conference on Tuesday.
For the time being, investors will be required to put money into the country.
“The current level of investment is very low, so that’s why we have to look at a different strategy, a new strategy,” Gonçalsaid.
“We are ready to sell our shares.”
The government is aiming to sell the largest shares in Petrobras to private investors at a loss of about $10 billion.
In an attempt to increase the countrys competitiveness, it plans to buy back bonds from other creditors, which are expected to raise $200 billion.
“This strategy will not change in the future, but we need to do it,” Goncervesaid.
Brazil will be able to raise some of the money through bond sales, but it’s unclear how much will be returned in return.
It is unclear how long the country can borrow, as the government can’t meet its debt obligations until 2018.
To finance its debt payments, the government will have to slash spending.
Brazil has cut spending by more than a third since the crisis hit, and the government needs to cut more, particularly in social services and public health, which is why it has increased the number of people on disability.
Government debt has risen from about $6 trillion to $7 trillion, and it has the world’s largest public pension fund, the Pension Fund of Brazil, which funds about 80 percent of the country s economy.