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

Best practices in Public-Private Partnerships financing in Latin America
contribution; there is no commercial risk for the concession
holder.
The financing idea started from offering to the international
bank the APW, with no resource for the investor. The bank
would then issue the bonds with guarantee of the APW as
an underlying asset. The “quasi sovereign” nature of the
obligation made it possible to draw the interest of high level
investors and incur reasonable financing costs.
In order to structure the IIRSA projects, a bridge loan was
granted by the CAF. For IIRSA Norte, the amount was US$ 60
million and for IIRSA Sur, US$ 150.5 million. The credit term
was 3 years, at a LIBOR rate plus 1.5%. Pre-payment was not
penalized. Resources obtained from the financial close were
used to pay the LCE early.
In the case of IIRSA Norte, a CRPAOs sale agreement was
signed by the operator and the CRPAO Purchaser. The funds for
the purchase of CRPAOs came from an emission of notes in the
international market through 144-A / Reg S. The rate of notes
was 8.75%. The amount available to buy CRPAOs was US$
224 million, with availability of funds as per a pre-established
chronogram. CRPAO payments were partially guaranteed by
the IADB for an amount up to US$60 million.
In IIRSA Sur, a take-or-pay contract for the future purchase of
the totality of CRPAO’s was signed, for an amount equal to
US$ 600 million. Unlike IIRSA Norte, it did not require Partial
Guarantees. Availability of funds was as per a predefined
chronogram, in the works execution term.
Alfonso Navarro, in turn, pointed out, regarding projects
under public-private partnerhips (or APPs as they are known
in Mexico) for the development of social infrastructures, that
four projects at the federal level and five at the state level
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