🚥 Capital on the move

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Rio Grande do Sul launched two funds worth a combined BRL 402 million (USD 79.5 million) on September 21, the first of their kind in Brazil. The larger of the two, Fundo Fácil RS, will deploy BRL 300 million to bring the state’s small and midsize companies to the capital markets as an anchor investor. If the market buys at least 60% of a debt issue, the fund can take up the rest, capped at 40% of the offering or BRL 30 million, whichever is lower.

Eligible companies must have an annual revenue of up to BRL 500 million and fall under the Fácil regime, created by the CVM, Brazil’s securities regulator, created to make issuing securities cheaper and simpler for smaller firms. Invest RS scouts and prepares candidates, and Banrisul Corretora manages and analyzes the deals. The goal is to unlock about BRL 750 million in investment in the state.

The second, the Rio Grande do Sul Climate Risk Fund, starts with BRL 102 million and can invest some or all of it in insurance-linked notes tied to climate events in the state. By absorbing some policy risk, the fund lets insurers expand coverage in flood-prone areas. Money not allocated to the notes stays in liquid, low-risk assets, building a reserve that reduces reliance on emergency aid after major disasters.

The state is also getting ahead of Brazil’s tax reform. Incentives under ICMS, the state value-added tax, will begin shrinking in 2029, and the tax will eventually be eliminated in 2033. With tax-break competition between states off the table, Rio Grande do Sul is trading forgone revenue for financial instruments. “Fundo Fácil RS is the first step in the fund platform we are working on,” said Rafael Prikladnicki, president of Invest RS.

TusHoldings, the science and technology services arm of Beijing’s Tsinghua University, wants to bring to Rio Grande do Sul the “twin parks” model it runs in other countries. The format combines technology links, startup incubation, and support for companies entering new markets.

The idea took shape during a September 21-25 visit by 12 executives and specialists from eight organizations linked to the group. The trip was organized by Invest RS and Instituto Caldeira organized the trip as part of Semana Caldeira in Porto Alegre. The delegation toured the Tecnopuc and Tecnosinos technology parks, held business meetings with local companies, and visited CMPC in Guaíba and Randoncorp in Caxias do Sul.

Founded in 1911, Tsinghua is one of China’s most prestigious universities and ranks among Asia’s best. It also trains much of the country’s political and scientific elite. President Xi Jinping studied chemical engineering there, and his predecessor, Hu Jintao, studied hydraulic engineering.

TusHoldings grew out of Tsinghua Science Park, created in the 1990s to bring academic research closer to industry. The group now runs around 300 innovation hubs worldwide.

Beyond the park, the company is seeking partners for an innovation platform linking institutions from BRICS countries. “You can read articles, watch television, but nothing is better than going in person to feel the real people, the factories, the companies, and the innovation environment,” said Herbert Chen, vice president of TusHoldings.

Invest RS is now making the return trip. Between late October and early November, the agency heads back to Asia, with stops in China and Japan.

The centerpiece is a new-energy event organized with Chinese companies to connect them with opportunities in the state’s energy transition. The team will also attend the 9th China International Import Expo (CIIE), which will take place in Shanghai from November 5-10. In Japan, the agency joins a panel hosted by FT Locations, the Financial Times Group’s foreign direct investment division. The full schedule will appear in upcoming editions.

Invest RS opened its first international office in Shanghai on August 25. On the same day, it signed a memorandum of understanding with the China Semiconductor Industry Association, the country’s chip industry group.

A semiconductor supply chain is already forming in the state. In Cachoeirinha, Tellescom is building a BRL 1 billion chip packaging and testing complex, with four plants planned by 2029. In Canoas, John Deere is investing BRL 75 million in a plant for electronic components such as modules and GPS receivers for farm and construction machinery, due to start operating in July 2027. The state’s Semicondutores RS program coordinates the sector’s initiatives.

Casa dos Ventos plans to invest about BRL 10 billion in Rio Grande do Sul by 2030 and reach 2 GW of operating wind capacity in the state, according to its CEO, Clécio Eloy.

About 40% of the sum will go to the Torquato Severo wind complex in Dom Pedrito, in the Campanha region. Developed with local company DGE, the 700 MW project features 90 turbines and costs BRL 3.9 billion. It already holds a preliminary license from Fepam, the state environmental agency, and a grid connection contract with ONS, the national grid operator. Construction begins in 2027 and is expected to generate 3,000 jobs, with operations starting in 2029. The company has signed an engagement agreement with Invest RS.

Terminal Rio Grande do Sul S.A., a joint venture between Chile’s CMPC and Neltume Ports, signed a lease on September 11 for a 412,500 m² site at the Port of Rio Grande to build a BRL 1.4 billion pulp terminal. The contract runs 25 years, renewable for another 25. Capacity will reach 9 million metric tons a year from the 11th year of operation.

In return, CMPC will pay BRL 142.7 million to Portos RS, the state port authority, to dredge Porto Novo’s access channel and turning basin, increasing the draft from 9.5 meters to as much as 12.5 meters.

Redata, signed into law on September 15, suspends import duties and the PIS/Cofins and IPI federal taxes on IT equipment for data centers for a period of five years. In exchange, all contracted power must come from clean or low-emission sources, at least 10% of capacity must serve the domestic market, and 2% of the value of equipment bought under the program must go to research and development.

The state already has projects underway. Scala AI City, in Eldorado do Sul, plans up to 4.75 GW over the long term. Parks is investing BRL 500 million in Cachoeirinha, and Tecto has announced a 20 MW data center in Porto Alegre connected directly to the Malbec subsea cable. On September 9, Invest RS, Tecnopuc, and the state industry federation Fiergs gathered industry players at PUCRS to discuss an FGV study on the economic impact of these investments.

Rio Grande do Sul’s agribusiness exports reached USD 3.8 billion in Q2, up 22.2% from a year earlier, according to a technical note from the state’s Department of Economics and Statistics. Soy exports grew 47.6% on a harvest 34.4% larger. Meat sales totaled USD 771 million, up 24.7%, and cereals, flours, and preparations rose 70.8%. In the first half, the sector sold USD 7 billion abroad, an 8.8% increase, accounting for 71% of the state’s exports.

Invest RS will receive the 2026 Excellence in Economic Development Award from the International Economic Development Council (IEDC), the world’s largest association in the field, in late October. Rafael Prikladnicki, the agency’s president, will also join the council’s board of directors. The award recognizes Desenvolve Município, a program that has brought together 229 municipalities and structured 61 projects, generating about BRL 1.1 billion in opportunities. The ceremony will be held at the IEDC annual conference, which is scheduled to take place from October 25-28 in New Orleans.

Invest RS also runs RS em Dados, its bilingual open-data platform, with interactive maps and dashboards on the state’s economy, companies, workforce, and foreign trade.