Latin America offers infrastructure investment opportunities of US$4.5 trillion over the next 10 years

Investment in infrastructure is at the core of discussions on the development of Latin America. Opportunities identified for the next decade amount to US$4.5 trillion. There is already a series of projects and programs to be implemented over the next 10 years in the transport and telecommunications sectors alone, covering a total of 22 initiatives, with a combined investment of US$117.8 billion.

The 409 projects to be executed in the infrastructure integration portfolio in South America, totaling US$150.4 billion in the sectors of transport, telecommunications and energy, represent another great investment opportunity. In addition, two key sectors –ports and airports – are expected to require investments in the order of US$55 billion and US$53 billion by 2040, respectively.

Supporting a total of 77 regional integration projects amounting to US$30.85 billion in the past 20 years, CAF-development bank of Latin America- organized today the CAF Conference in Madrid: Infrastructure for Latin American Integration, where Ministers of Economy, Finance and Planning, representatives of the private sector, and experts from Latin America and Spain discussed opportunities to develop infrastructure and establish logistics corridors, as well as the challenges and opportunities of project financing and priority investment programs, in order advance a regional integration agenda.

The executive president of CAF, Luis Carranza, pointed out “gaps in infrastructure in Latin America, including water and electricity, transport, logistics and telecommunications, which are sectors where GDP investment should be doubled, if we want to reach the same level as leading countries in Asia and Europe.” Carranza also stressed that “infrastructure is a dynamic element for economic growth, through improvements in productivity and social development, reduction of poverty, and consolidation of the middle class, which is CAF’s ultimate goal.”

There is a global commitment to the functionality of integration corridors, focused on systemic logistics performance, as well as the use of new technologies and innovations, which have resulted in efficient solutions in Canada and countries of Central Asia, among others. In this regard, CAF proposed a project focused on logistics corridors of integration (CLIs), which may become a major promoter of physical and functional integration of infrastructure, in order to promote the competitiveness of Latin American countries.

In this sense, it is necessary to take an evolutionary leap to understand the regional integration infrastructure agenda, shifting from a “one-dimensional paradigm” focused on physical integration to a “multidimensional paradigm” of physical and functional integration. This functional approach must encompass systemic interventions—infrastructure, services, governance—on CLIs that articulate various areas of development such as productive clusters, interconnection hubs, border crossings, metropolitan areas or ports, among others.

The Spanish Minister of Development, José Luis Ábalos, has pledged the collaboration of his Ministry with the private sector in addressing infrastructure initiatives, explaining that “the support and collaboration with internationally active Spanish companies is a key factor,” and the minister has secured the Government’s commitment with Latin America, stating: “I am in favor of the revitalization of the Ibero-American community of Nations as a bridge of cooperation with Europe, not only from an emotional and historical perspective, but also in political and economic issues, particularly in the infrastructure sector.”

The Spanish Minister of Economy and Enterprise, Ana de la Cueva, stressed the importance of public-private partnerships to optimize resources and meet the growing infrastructure demand: “It is necessary to complement the traditional financing approach by mobilizing private capital.” The minister also highlighted the role of Spanish companies in the development of infrastructure in Latin America, explaining that “investments by Spanish companies and multilateral financial institutions like CAF have closed the vertical gap in infrastructure in the region, which has a positive impact on the economy and social well-being.”

The meeting to discuss financing and investment opportunities in Latin America, held at Casa de América in Madrid, Spain, was attended by Esteves Colnago Junior, chairman of the Board of Directors of CAF and Brazilian minister of Planning, Development and Management; Mariana Prado, Bolivian minister of Development Planning; Dyogo de Oliveira, president of the Brazilian Development Bank (BNDES); Mauricio Cárdenas, Colombian minister of Finance and Public Credit; Humberto Colman, Paraguayan deputy minister of Finance; Pedro Grados, chairman of the Board of Directors of Peru’s Corporación Financiera de Desarrollo; Mario Bergara, President of the Central Bank of Uruguay; Santiago Miralles, director general of Casa de América; Salvador Marin, president of COFIDES; Narciso Casado, director of the Chairman’s Cabinet, International and Institutional Relations of the Confederation of Employers and Industries of Spain (CEOE), Isaac Martín-Barbero, president of INECO; and Juan Béjar, president of Globalvia, to name a few.