Foreign Direct Investment in Latin America and the Caribbean 2017

66 Chapter I Economic Commission for Latin America and the Caribbean (ECLAC)
continue to invest in mobile telephony. Investments in telecommunications are expected
to rise in the next few years, as a result of the Red Compartida project, a public-private
partnership that seeks to increase coverage of advanced 4G LTE services and is expected
to generate more than US$ 7 billion in investment over the next 20 years, which was
put out to tender in 2017.— The winning bid was made by Altán Redes, a multinational
consortium whose strategic partner is the Spanish Groupo Multitel and whose main
investor is North Haven Infrastructure Partners II, an infrastructure fund managed by
Morgan Stanley Infrastructure, and which comprises other international investment
funds and Mexican partners. In April 2017, this consortium completed the US$ 2.3 billion
financing process: 33% in the form of capital contributions by the partners, 37% in the
form of loans from technology suppliers (China’s Huawei and Finland’s Nokia) and the
remaining 30% will be provided by national development banks (the National Bank for
Public Works and Services, Nacional Financiera and the National Foreign Trade Bank).
4. Central America: Panama performs well
FDI to Central America grew 4.9% in 2016 and stood at US$ 11.971 billion. Higher
investments in the subregion’s two main recipients —Panama, which received 44%, and
Costa Rica, with 27%— offset the drop in FDI to the other Central American countries.
Map I.2
Central America (selected countries): foreign direct investment inflows, 2015 and 2016
(Billions of dollars)
1.204
1.221
Guatemala
1.181
Honduras
1.139 0.950
Nicaragua 0.888
0.399
0.374
El Salvador
4.494
Panama
5.209
3.145
Costa Rica
2015 2016
3.180
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of preliminary figures and official estimates at 15 June 2017.
FDI flows to Panama rose 15.9% to US$ 5.209 billion in 2016, a record after
four consecutive years of increases, following the upward trend that began in the
mid-2000s. This level of investment placed Panama in sixth place in terms of FDI
inflows for the whole of Latin America and the Caribbean, behind Peru. Reinvested
earnings were the largest component of FDI in Panama, with 66% of the total, and
the amount was just 2% higher than that seen in 2015. Intercompany loans made up
19% of FDI, down 7%, while capital inflows accounted for 15% of the total, making
it the smallest component of FDI for the fourth year running.