Alckmin announces BRL 3 billion for second phase of industrial park modernization program

Brazil’s Acting President and Minister of Development, Industry, Trade, and Services Geraldo Alckmin announced on February 28 the second phase of the government’s Accelerated Depreciation program. The program to renew the Brazilian industrial park will make BRL 3 billion available in loans in 2025 and 2026 — BRL 1.5 billion each year.

The measure encourages the acquisition of new machinery, equipment, devices, and instruments, benefiting 25 economic activities across the industrial sector. To the minister, the measure represents a virtuous circle for investment in the national industry.

“This encourages the industrial park to renew itself. You encourage industries to replace machines and equipment with more efficient machinery. More productivity, energy efficiency, and decarbonization,” highlighted the Minister in an interview with the press in Brasília, in which he also announced the beginning of self-certification of origin for exporters as of March 1.

“The second phase of accelerated depreciation comes at a good time, when industrial capacity is high and there is little idle capacity. Companies must expand their factories and industries,” the Minister added. In 2024, Brazilian industrial production was up 3.1%, the third best result in the last 15 years according to data from the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística/IBGE). The manufacturing industry alone increased 3.7% in the year.

LOANS — The Secretary of Industrial Development, Innovation, Trade, and Services at the Ministry of Finance (Ministério da Fazenda/MF), Uallace Moreira, explained that the government is redirecting the loans that were not used in the program’s first phase — BRL 3.4 billion — to this phase, shared between 2024 and 2025.

Last year, the Accelerated Depreciation program developed by the Ministry of Industrial Development, Innovation, Trade and Services (Ministério de Desenvolvimento, Indústria, Comércio e Serviços/MDIC) and the Ministry of Finance benefited 374 industrial projects, giving access to approximately BRL 200 million in tax credit for the acquisition of new equipment. Highlights are the sectors of rubber products; biofuels; cellulose; and machinery and equipment.

“Depreciation only occurs when the invoice for the purchase of machinery and equipment is presented. This is the proof for new machinery and equipment — so much so that depreciation does not include used machinery and equipment,” explained Secretary Uallace Moreira.

REDUCTION — Accelerated depreciation is a mechanism that works as an advance on revenue for companies.

Every time a capital asset is acquired, the businessperson can deduct its value from future Corporate Income Tax (Imposto de Renda de Pessoa Jurídica/IRPJ) and Social Contribution on Net Income (Contribuição Social Sobre o Lucro Líquido/CSLL) statements. Under normal conditions, this discount is gradual and occurs over up to 20 years as the asset depreciates.

With accelerated depreciation, the deduction can be made in just two stages — 50% in the first year, 50% in the second.

CASH FLOW — In addition to modernizing factories, the measure can help increase companies' cash flow and the so-called Gross Fixed Capital Formation (Formação Bruta de Capital Fixo), which measures future production capacity through the acquisition of machinery. Studies by private banks and Brazil’s Institute of Applied Economic Research (Instituto de Pesquisa Econômica Aplicada/IPEA) indicate that the initiative has the potential to leverage investments of around BRL 20 billion, with repercussions on the increase in GDP and job creation.