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

Best practices in Public-Private Partnerships financing in Latin America
• They are in accordance with the economy’s expansion phase.
• Projects provide visibility.
• Increase in national productivity, implying major future
contributions.
Financial Instruments
The instruments that have been used in infrastructure financing
are: (i) bonds intended to meet the financial needs of large
and medium companies. In these assets AFORES have invested
US$ 10, 3 billion; (ii) in terms of shares, investments of US$
632 million have been made in the infrastructure sector; (iii)
FIBRAS (Spanish acronym of Real Estate Investment Funds)
have invested through instruments specialized in financing
housing, which include special payment characteristics in
dividend payment and tax treatment. Investments amount to
US$ 152 million; (iv) CKD (structured equity securities) enable
the financing of small companies in any economic sector or
infrastructure area located in Mexico. Through CKDs, pension
funds have financed the infrastructure sector and other projects
for an amount equal to US$ 3.2 billion. Approximately 50% of
this amount is destined to infrastructure and housing.
CKDs are not only used to finance investment projects, but
these certificates can be used for financing solvent companies
that are not listed in the Stock Exchange (companies may
belong to any economic sector). These trustee certificates are
not associated with fixed rates, but are remunerated with cash
flows produced from the project; there is no establishment of
pre-fixed debt payment because it is equity. These instruments
have been complemented with subordinated debts, convertible
debts, guarantees, buyouts, distress debts, restructuring,
among others.
Finally, an issue to be considered is that of institutionality ,
which is essential for the structuring and design of long-term
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