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

Best practices in Public-Private Partnerships financing in Latin America
Chart N.2
Infrastructure
Investment Fund
(FINFRA)
Highways
PPP Trust
(FARAC)
number of investors
participating in bids and
greater offer of projects.
Infrastructure
National Fund
Before 2009, projects
entailed more access to
financing and therefore,
there were fewer capital
requirements. These
conditions reverted after
the crisis, and it is now
Disincorporation
of assets
necessary to combine the instruments of the Bank and those
of the Fund in order to improve the projects’ financing profile.
This translates into FONADIN sharing risks with the bank.
However, it also shares the project’s profits when the project
exceeds its financial condition. With respect to this subject,
FONADIN established mechanisms by which the company
received subsidies and has the obligation to repay them
once a certain TIR (internal rate of return) level is exceeded.
Nevertheless, the implementation of this methodology was
complicated and thus it was decided to take the project’s
gross income.
Projects
Financing
Source: BANOBRAS.
Nowadays, FONADIN has a pipeline of 91 projects. The total
value of included projects is US$18 billion. The total support
that these projects would require from FONADIN is estimated at
around US$7 billion. This entity is analyzing 9 investment funds
specialized in infrastructure with an accumulated objective value
of US$3.5 billion. The estimate is that FONADIN participation in
these investment funds may reach 650 million dollars.
FONADIN is financed by the Government with the collection of
tolls from different roads managed by the Federal Government.
Therefore, it is a fund with significant liquidity levels. This Fund
- 52 -