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Colombia

A portrait of PPPs in Latin America

Gastón Astesiano's picture


Photo: Deutsche Welle | Flickr Creative Commons 

As in many regions, countries in Latin America and the Caribbean are underinvesting in infrastructure—spending in the sector is only about half of the $300 billion needed annually to encourage growth and reduce poverty. Addressing this issue involves the successful interaction between public officials and leading infrastructure actors, particularly in the private sector. Stimulating such public-private dialogue is a priority for the Inter-American Development Bank (IDB) Group, a technical partner of the Global Infrastructure Facility (GIF). Along with other partners, our recently established PPP unit supports governments, international financial institutions, and the private sector to develop infrastructure projects.
 
It was therefore a privilege for me to moderate a panel on country infrastructure programs in Latin America at the GIF’s annual Advisory Council meeting in April 2017. We covered three countries—Colombia, Argentina and Peru—at different stages of PPP market development. The findings were encouraging and illustrate a path forward for other countries in the region:

Three ways to partner with cities and municipalities to mobilize private capital for infrastructure

Sara Perea Sigrist's picture



When seeking to engage private partners, one thinks of large, high-cost national infrastructure projects. But subnational governments are also effectively partnering with the private sector by leveraging assets, rethinking “infrastructure,” and establishing mechanisms to give long-term security.
 
Some Latin American governments are capitalizing on legislative frameworks for Public-Private Partnerships (PPPs)—in some cases tailoring laws for subnational use, and using experience gained from large-scale national projects.
 
While not always technically PPPs, this private sector capacity can be harnessed to deliver innovative smaller projects, from using drones to deliver medicines to health centers in rural communities in the Dominican Republic to building market stalls in a new Honduran bus terminal to spur the development of small businesses.
 
Here are three ways cities and municipalities can mobilize capital and innovation in infrastructure.
 

Renewables, solar, and large size projects trending in new data on private participation in infrastructure

Clive Harris's picture



Translations available in Chinese and Spanish.

Many of you are already familiar with the PPP (Public-Private Partnerships) Group’s Private Participation in Infrastructure (PPI) Database. As a reminder for those who aren’t, the PPI Database is a comprehensive resource of over 8,000 projects with private participation across 139 low- and middle-income economies from the period of 1990-2015, in the water, energy, transport and telecoms sectors.

We recently released the 2015 full year data showing that global private infrastructure investment remains steady when compared to the previous year (US$111.6 billion compared with US$111.7 the previous year), largely due to a couple of mega-deals in Turkey (including Istanbul’s $35.6 billion IGA Airport (which includes a $29.1 billion concession fee to the government). When compared to the previous five-year average, however, global private infrastructure investment in 2015 was 10 percent lower, mainly due to dwindling commitments in China, Brazil, and India. Brazil in particular saw only $4.5 billion in investments, sharply declining from $47.2 billion in 2014 and reversing a trend of growing investments over the last five years.

Steering Colombia’s future: Ruta del Sol lays the foundation for nation’s road PPPs

Richard Cabello's picture
Photo: Euroestudios

Like other countries in Latin America, Colombia has been expanding its road network over the years using a variety of public-private partnership (PPP) models and contractual structures. However, many of these projects were not properly prepared and structured, which in some cases has led to contract renegotiations. In addition, these projects attracted very limited participation from international investors.

Record investment in transport boosts overall private participation in infrastructure in 2014

Henry Kasper's picture

Imagine record commitments in transport that are 26% higher than the next best year since the inception of the Private Participation in Infrastructure (PPI) Database in 1990. That’s exactly what took place in 2014—massive private participation in transport that culminated in the fourth highest level of global investment (transport, energy, and water) ever recorded. Indeed, the PPI Database’s 2014 Global Update released in June, 2015, shows that total investment in transport hit a record high of US$36.5 billion, driven by a handful of outsized deals in
Latin America and, more specifically, Brazil—including a mega airport project totaling US$10 billion. Meanwhile, energy fell 19 percent year-over-year due to fewer commitments in five out of six regions, while water grew 14 percent, driven by key deals in Brazil, Mexico, and Peru. In a separate report, Telecom showed modest year-over-year declines, extending a trend of fewer projects and lower investment over the past five years.  

Obrigado, Brasil!

Clive Harris's picture
Paving a highway in Brazil. In 2014, Brazil's
 infrastructure investment commitments
​drove an overall global increase.
In March we released the update from the Private Participation in Infrastructure (PPI) Database for the first six months of 2014, covering investment activity in energy, transport, and water and sanitation. The good news of a rebound of investment commitment from a decline in 2013 was noteworthy, alongside the heavy concentration of activity in Brazil.
 
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012. 
 
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014.  Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
 
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC.  The top five, in order, were Brazil, Turkey, Peru, Colombia, and India.