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

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Best practices in Public-Private Partnerships financing in Latin America Macquarie and Red de Carreteras de Occidente (RCO – Spanish acronym for Western Highway Network) are among the main CKDs associated with infrastructure and Macquarie is the first infrastructure investment fund launched in Latin America by the Australian Bank Macquarie. RCO was the first project that issued CKD’s (October 2009) and is mainly in charge of the Maravatío-Zaplotanejo Highway, Guadalajara-Zaplotanejo Highway, among others. It was after March 2008, with the reform of the investment regime, that direct investment in infrastructure was allowed through trusts, as well as financial instruments associated with CKD’s infrastructure projects, Infrastructure and Real Estate Trusts; investments of up to 40% of the securitizated instruments portfolio and up to 15% in structured instruments (depending on the type of pension fund) were accomplished. Peru Resources invested in infrastructure by pension funds are USD 3,416 million or 2.3% of the GDP. The main investment method is indirect through shares and bonds of companies associated with infrastructure and investment funds of this sector (USD 2,483 million – 1.7% of GDP). Direct investment is carried out through bonds and shares of infrastructure projects and the infrastructure trust, such as the financing of the IIRSA Sur highway (Interoceánica Sur), through CRPAO (Certificates issued by the Government for Annual Payment derived from Works), for example. The infrastructure investment funds market in Peru is relatively new. Presently, it includes: (i) Investment fund in infrastructure, public services and natural resources of AC Capitales, (ii) Larraín Vial Energía Latinoamericano Investment Fund, and (iii) Brookfield & AC Capitales Infrastructure Investment Fund. - 32 -
Day 1 - SECOND SESSION The latter was created by the Ministry of Economy as a way to finance large investment projects during the financial crisis of 2009. Currently, it has secured almost USD 500 million. For a Pension Fund Manager (PFM) to invest in any instrument, it must be “PFM-able”. In other words, the Insurance and Bank Superintendence and PFA (SBS) authorizes PFM investment in such instrument. In some cases, this process can be long and complex, limiting the investment instrument’s offer. Pension funds can invest up to 100% of its portfolio in structured instruments (depending on the type of fund). - 33 -
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FINAL WORDS Clive Harris, PPP Pract
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