Tunnel between Santos and Guarujá will be financed by the Government of São Paulo with a loan from BB

Construction of the first immersed tunnel in Latin America has a cost of R\$ 6.8 billion. Of this total, R\$ 5.2 billion are public funds (Alexsander Ferraz/AT)

Of the R\$ 2.64 billion corresponding to its share in the Santos–Guarujá immersed tunnel project, the State Government will pay R\$ 2.57 billion through a loan obtained from Banco do Brasil (BB) — whose majority shareholder is the Federal Government. The credit operation was formalized this Monday (13), in São Paulo.

This contradicts the State Government’s previous statement, which earlier this month announced that it had already secured the transfer of its half of the project funds to the company, according to the contractual schedule (by the end of March). The State Secretariat for Investment Partnerships (SPI) had disclosed that the amount would come from a supplementary credit of R\$ 2.64 billion opened in the state budget.

When contacted, the SPI did not clarify why it had not made the required contribution more than two months after the contract was signed. In a statement, it said that “financing with Banco do Brasil is an alternative in the contract to enable contributions under market conditions. It will be repaid with the State’s own resources.”

Now, the Secretariat says that the supplementary credit opened in the budget “may also be used to complement any federal contributions, if necessary, ensuring the execution of the project.”

The other half of the funding for the tunnel, which involves R\$ 5.2 billion in public resources, is the responsibility of the Federal Government, through the Autoridade Portuária de Santos (APS), which states that it has the funds available. The port authority says it is only awaiting authorization from the Tribunal de Contas da União (TCU), expected later this week, as the transfer is temporarily suspended by the Court because APS has not signed the contract. The TCU recommended improvements in resource governance.

“The expenditure of funds will begin from February or March 2027, according to the established schedule. Thus, there will be time to approve the oversight and compliance model before the moment comes to effectively spend the allocated funds”, says the port administration.

Loan

According to Banco do Brasil, the structured credit operation has a term of 23 years, a grace period of 12 months, an interest rate of CDI + 1.59% per year, and is backed by a federal guarantee.

The construction of the first immersed tunnel in Latin America is estimated to cost R\$ 6.8 billion. Of this total, R\$ 5.2 billion are public funds, divided between the State and the Federal Government, with R\$ 2.64 billion each. The remaining amount will be invested by the private concessionaire Mota-Engil, winner of the bidding process.

The State Secretary of Finance and Planning, Samuel Kinoshita, stated that the partnership with the Federal Government was very important to bring the project to fruition, which had been under discussion for about a century. “This has always been the guidance of Governor Tarcísio de Freitas (Republicanos), and the Federal Government shared the same view.”

The President of Banco do Brasil, Tarciana Medeiros, said that by structuring the financing that enables the counterpart funding for the project, the financial institution reinforces its “vocation” to support the country’s development. “The immersed tunnel is more than a major infrastructure project; it symbolizes efficiency, logistics, urban mobility, and job creation throughout the Baixada Santista.”

Contract

As it is a public-private partnership (PPP), the concessionaire Mota-Engil was required to establish a Special Purpose Vehicle (SPV), a company with its own corporate registration (CNPJ), created exclusively for the project, with an escrow account for managing the financial resources to be invested in the venture.

After completing this stage, Mota-Engil and the São Paulo State Government signed the contract on January 28. As required by the contract, the State and the Federal Government had to deposit their respective shares into the SPV’s escrow account within 60 days.

The project

The tunnel will connect the municipalities of Santos and Guarujá through an immersed link beneath the Port of Santos channel. With a total length of 1.5 km, including 870 meters underwater, construction will be carried out using prefabricated concrete modules installed on the seabed of the port channel, as has already been done in Europe and Asia. The modules will then be submerged, fitted together, and covered with a layer of rocks. The structure will also include three traffic lanes in each direction, as well as a Light Rail Vehicle (LRV) system, a bicycle lane, and a pedestrian walkway.

Construction is scheduled to begin in 2027 and be completed in 2030, with full operation starting in 2031. The tunnel is expected to reduce travel time between the cities from 50 minutes to less than five minutes, benefiting approximately 2 million people in the Baixada Santista and generating around 9,000 jobs.