(Press Release) The World Bank’s private sector arm is betting big on Brazil, defying bearishness among other investors over mass demonstrations in the country and a slowing economy.

Latin America’s largest country was the biggest investment destination for the International Finance Corporation in the world in its financial year ending June for the second year running – with the organisation ploughing $2bn into the country.

Unlike the main body of the World Bank, the IFC is a for-profit organisation that acts as a private equity or investment firm and has made returns of 20 per cent or more a year in Brazil over the past decade.

“Obviously the news is troubling – we’ve got protests and slipping economic growth but at the same time we’re seeing bigger opportunities,” said Loy Pires, Brazil head of the IFC. “You’ve got to believe in the medium to long-term story.”

Brazilians took to the streets last month during the Confederations Cup, the warm-up event for football’s World Cup, to protest against poor public services, rising prices and government wastage and corruption.

The protests shook investors who were already growing more cautious about Brazil’s slowing economy, which grew less than 1 per cent last year, and persistent inflation and interventionist policy making.

Concerns over weakening growth and creative accounting in the government budget also led Standard & Poor’s to lower the outlook on Brazil’s credit rating to negative in a warning of a possible downgrade.

But many still believe the country’s longer-term structural story is still intact, with almost 40m people rising from poverty into the lower middle classes over the past decade.

Brazil’s agricultural sector has also become one of the world’s most competitive, with the country now the biggest exporter of sugar, coffee and orange juice, the second-biggest grower of soya beans and a major producer of beef.

This has created opportunities for investment in infrastructure to overcome bottlenecks in urban transport, railways, ports, roads and airports.

“The aspirations of a growing middle class, urbanisation, historic under-investment and strained public sector budgets drive selective opportunities for the private sector,” said Mr Pires.

Proponents of the Brazilian investment story also recently received a boost from Fitch, the rating agency which, in contrast to S&P, affirmed its rating on the country with a stable outlook.

Fitch said after a negative interventionist turn, policy making in Brazil was turning more positive, with the government and the central bank tackling inflation once again and trying to rein in fiscal spending.

“Despite the difficult domestic economic environment and the policy missteps by the authorities in recent months, Fitch believes that there are signs of policy corrections,” the agency said.

The IFC’s deals in Brazil include its largest equity investment in the country, a $200m stake in Sul America, the insurance company, and its largest financial sector debt transaction in Latin America, the lending of $470m to private bank Itaú for on-lending to women-owned small and medium enterprises.

The IFC also did deals worth $100m with Equatorial, a power company in the Amazonian state of Pará, and with BTG Pactual, the Brazilian investment bank, in distressed assets.