Formal education is a fundamental stage in individual development and is associated with better nutrition and health conditions, higher future income levels, and a lower likelihood of committing crimes in adulthood. Economic literature provides evidence of high returns associated with investments in education, both in Brazil and abroad.

Preschool education, in particular, not only generates high future returns in terms of individual income but is also crucial for enabling parents (especially mothers) to access the labor market. However, according to data from the National Education Plan (PNE) Observatory, early childhood education coverage for children aged 0 to 3 was only 37.8% in 2019.

Despite a significant increase in daycare availability in Brazil between 2009 and 2019 (88.5%), largely driven by public policies, the supply of early childhood education remains insufficient and unequal. Brazilian municipalities have struggled to meet the targets set by the PNE.

According to estimates from the National Council of Municipalities, meeting the PNE goal of expanding early childhood education coverage to 50% for children aged 0 to 3—equivalent to creating over 1.3 million new spots—could cost municipalities around R$ 37.4 billion.

Although direct investment from municipal and state governments is necessary, given the scale of the challenge, seeking alternative and/or complementary structures to support this investment is essential.

In this context, one alternative to traditional public contracting is public-private partnerships (PPPs). Education-sector PPPs in Brazil—whether operational or still being structured—typically involve construction/renovation, financing, maintenance, and operation, with variations across these parameters. Importantly, they do not include pedagogical services, which remain the responsibility of the granting authority.

Well-structured PPPs allow for alignment of interests between the public sector and private partners. Despite their advantages, PPPs are complex contractual structures and still rare in Brazil’s education sector, involving lengthy procedures and higher transaction costs compared to traditional public contracting.

However, according to the authors of the article, while not a one-size-fits-all solution, there is evidence that this type of partnership in education can offer benefits such as shorter and more predictable construction timelines, transfer of investment risks to the private sector, and freeing up pedagogical staff from administrative management, allowing greater focus on educational activities.

In the article “BNDES’s experience in structuring early childhood education public-private partnerships (PPP)”, published in Revista do BNDES 59, Felipe Borim Villen and Felipe Cerqueira Guth present the main challenges faced by public entities in structuring education PPPs, as well as lessons learned and possible solutions for adopting these models, based on the experience of BNDES teams.