Since Jair Bolsonaro’s (PL) pre-candidacy for the presidency in 2018, the great campaign promise was to denationalize at least 50 Union domain companies in the first year of office. Since the beginning of the mandate, privatization movements entered the government plan to reduce Brazilian public debt. In fact, important auctions and concessions were held, such as 5G and railways, but there was a lot of expectation around the privatization of strategic companies. We are already in the fourth year of office and have not yet left the paper. Now with the elections approaching, the government has mobilized to advance with this process.

After President Bolsonaro was sanctioned, in July 2021, Law 14,182, which determines the privatization of Eletrobras (Brazilian Electric Centers S/A) and authorizes the capitalization of the company through the issuance of new actions, the spirits rose. After a long waiting period for the liberalization by the Federal Court of Audit (TCU), the company officially had the decision of its new privatized share capital. This is a landmark in the history of Brazil. The Federal Union is no longer the company’s controller through participatory dilution with the issuance of the new shares, which enter the market for the amount of R$ 42 per share. Thus, the company becomes one of the most valuable ventures on the Brazilian stock exchange, along with Suzano and JBS.

Recently, the House of Representatives approved the bill that limits the incidence of the Tax on Circulation of Goods and Services (ICMS in portuguese) up to 17%. However, states are disgruntled and want to bar the proposal in the Senate or the Supreme Court, especially those who are under a tax recovery regime and will have significant losses. At this conjuncture, the federal government intends to compensate for the loss of state revenues by zeroing the ICMS on diesel with the funds raised from the privatization of Eletrobras. It is an important movement for President Bolsonaro’s allies who are concerned about the impact of inflation at the polls in October. About the elections, former President Luiz Inacio Lula da Silva (PT) stated that, if elected, he will nullify the privatization of Eletrobras, which will surely lead to tremendous legal disorder. With it is the Brazilian Investor Association (Abradin) that opened a Public Civil Action (ACP in portuguese) in order to suspend privatization. Meanwhile, the Minister of Economy, Paulo Guedes, in his participation in the World Economic Forum in Switzerland, said that if Jair Bolsonaro (PL) is reelected, Petrobras will be privatized. Just under four months to the election period, many moves are being made to try to influence the outcome of the ballots.