Best Practices in PPP Financing Latin America - e-Institute - World ...

Best practices in Public-Private Partnerships financing in Latin America
strategies are different, highlighting schemes in infrastructure
investment funds, trust funds, structured instruments (CKDs in
Mexico), private equity, among others.
Problems in infrastructure investment
Among the main limitations faced by pension funds to invest
in infrastructure are: (i) availability of investment opportunities
for private capital and pension funds; (ii) maturity and size
of the pension fund market. In other words, the amount of
available capital for investment; (iii) regulation for pension
funds investment and; (iv) complexity of infrastructure
investment.
Specifically, the infrastructure sector features the lack of
long-term political commitment, which can be translated into
regulatory instability. Likewise, there is fragmentation in the
different government levels, with no entity that concentrates
infrastructure matters. Far more worrying is the fact that there
are few investment opportunities in the sector, and there are
excessive risks. In addition, pension funds have little experience
in infrastructure financing and investors have a “short-term”
perception, which means they want profits in the short-term.
It is also seen that conditions for investment in the
infrastructure sector are not clear and transparent. Thus
information about infrastructure projects and bidding
processes is often diverted through several bureaucratic and
legal hurdles, which are difficult to predict at the outset of
project planning.
Tuesta recognized the participation of pension funds in
infrastructure investments, yet he also identified certain
problems that restrict further investments. These restrictions
are: the absence of a clear integral process for the
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