Minas Gerais Seeks Entry Into Federal Propag Program With 20% Debt Cut Option

Overview

• Minas Gerais sent a formal request on November 6 to the National Treasury to join Propag’s 20% abatement modality for a debt estimated at R$181 billion, repayable over up to 30 years at 0% nominal interest adjusted by IPCA.
• The state offered about R$96 billion in assets and revenue streams, including roughly R$72.7 billion in receivables from compensations and credits recognized in court decisions.
• The submission lists R$2.2 billion in state real estate, R$2.6 billion in outstanding tax debt stock, and R$19.2 billion in stakes in companies such as Cemig, Codemge, Copasa, and MGI.
• Cemig was included in the package with a proposed shift to a corporation model outlined in pending state legislation, and any change depends on popular approval or a constitutional amendment.
• The government requested termination of the state’s fiscal recovery regime to begin paying under Propag in January 2026 and projects signing an initial addendum by mid-December, while critics oppose removing a referendum when privatization is tied to debt repayment.