Welcome to the Latin American Infrastructure Symposium
The future is bright for Latin American infrastructure, as a confluence of demographic trends and legislative reform throughout the region are expected to accelerate investment to roughly four percent of GDP, representing approximately USD 95.17bn in investment annually. A key driver to this growth is the continuing proliferation of public-private partnerships (PPP). More Latin American governments are turning to PPPs in order to finance a range of projects, including the building of airports, highways, and water treatment plants among others.
In order for Latin American countries to hasten world class infrastructure development, as noted in a recent World Bank report, officials have to resolve "inefficient" infrastructure investment as well as improve the procurement processes. And there is reason for optimism as government and private sector bodies are more proactively addressing those issues, presenting a number of interesting and exciting opportunities for investors.
Join the Inframation News team and esteemed panelists as they discuss and debate the most important issues impacting the opportunities and risks for PPP investment across Latin America for both today and the future of tomorrow.
Surveying the State of the PPP Market throughout Latin America
It is relatively straight forward for market participants to discuss broadly the Latin American infrastructure market in terms of opportunities and risks. However, serious due diligence will require focusing not only on the policies and regulatory differences of individual countries, but also the key issues applicable to smaller regional and municipal governments. A notable trend of late has project developers approaching local officials and submitting unsolicited bids, whereas previously bidders primarily relied on RFQs issued from a central government. As a result, various challenges may arise, such as the enforcement of contracts with local partners and the typically lengthy duration of the approval process. For example, according to a World Bank Doing Business report there is significant variance among the 32 states of Mexico in terms of time, efforts and costs for obtaining construction permits and registering property.
Delegates will listen to panelists discuss the issues impacting the growing PPP market in Latin America, including:
- What should project developers know about doing business in Latin America, especially in light of some of the recent legal cases involving government bureaucrats?
- How will legislative and presidential elections over next 18 months in Argentina, Colombia, Chile, Mexico, Venezuela and Brazil impact projects and dealmaking?
- What is the forecast for the greatest infrastructure needs throughout different regions, and what opportunities will that present for investors to take advantage of?
- Where will new PPP projects appear and what assets will gain traction with the procurement model?
- Explore Latin America's most promising regions and cities with a focus on the most important regulatory issues pertinent to infra projects.
Exploring New Markets and the PPP Frontier
Historically, the transportation sector has dominated the Latin American PPP pipeline. And while transportation projects in procurement remain steady, project developers are looking to expand their opportunities by looking more closely at social and environmental PPP projects, albeit in unconventional markets such as Central America and Paraguay – where PPP pipelines have materialized over the last few years.
Thanks to legislative reform and availability of capital the PPP procurement model is fast becoming a viable solution for hospital and water treatment plant construction. For instance, Uruguay has placed four education PPPs in procurement with a valuation of USD 289.5m while Peru has procured that volume with water and telecom PPP projects with a valuation of USD 370.8m, year to date.
Delegates will listen to panelists discuss where project developers are sourcing new PPP projects and what asset classes are gaining prominence within the procurement model.
- How has the PPP model evolved within Latin America?
- What unconventional assets are grantors assessing for PPP procurement? What are the risks in PPP "frontier" markets found in Central America, Paraguay, Uruguay and Ecuador?
- Will the Brazilian pipeline bounce back? How much more can the Mexican pipeline grow?
- What remaining bumps in the road lie ahead for highway P3s as some have struggled to secure financing?
- Which projects can authorities expect to receive the best value in return for the arrangement of a PPP?
Coffee Networking Break
New Dynamics of Leveraging Capital Pushes the PPP Model Forward
While traditional bank financing remains strong, the project finance market has seen growth as the number of dedicated funds and vehicles available to institutional investors looking to deploy capital in the region have expanded. However, as institutional investors support private debt funds throughout Latin America, the funds themselves must be selective as they search for projects with favorable pricing and financing terms.
Project developers are also in the favorable position of increasing their capacity for bond financings. In fact, project bond financing is a growing trend throughout the region as private equity and institutional investors become more acquainted with regional infrastructure investment risks, legal systems, government processes and how officials support infrastructure projects.
Panelists will explore new financing mechanisms, loan and bond structuring, risks and other issues around PPP financing throughout the Latin American region.
- How do foreign developers balance local currency revenues with international investment?
- How are investors dictating the terms, covenants and structure of project bond and loan deals?
- Examining the role of Mexico's Fibra-e structure for financing infrastructure projects.
- Do project developers need local partners or can they "go-it-alone"?
- What effect has the investment in debt funds had on the project finance market?
- Discuss the key macroeconomic factors impacting the financing of P3 deals.
Cocktail Networking Reception