CAF ratifies its catalytic role to attract investors interested in PPPs in the region

CAF – development bank of Latin America and the Caribbean – reaffirmed its catalytic role in attracting investment to promote the Public-Private Partnerships (PPP) model in the region, during its participation in the forum “PPP's: Transforming the development of infrastructure in Panama.” This event was organized in strategic alliance with the Panamanian Chamber of Construction (CAPAC) and the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP).

In her speech, Mónica López, senior executive of CAF's Transportation unit, highlighted the relevance of private investment in infrastructure projects for low- and middle-income countries at a global level, which exceeded USD 91 billion in 2022, with almost USD 25,000 allocated to Latin America and the Caribbean; and highlighted the role of multilateral organizations such as CAF: “our role is catalytic, promoting and facilitating knowledge, connecting investors and offering support.”

López highlighted that, to obtain good results in the implementation of PPPs in the long term, “collaboration between the parties is essential to align public and private interests.” He pointed out that adequate planning and the design of incentives are essential for the private investor to achieve the objectives of the public administration and obtain the desired profitability.

Furthermore, López emphasized the importance of differentiating between risk and uncertainty: “risk is known, measured, assessed and mitigated, uncertainty is not. It is crucial that risk is managed by the party that is best able to do so, and there must be a balance in the transfer of risks, since transferring risks to the private sector has a cost to the project.”

The forum also included the participation of Juan Manuel Sánchez, general director of Concessions of the Ministry of Public Works of Chile, who shared his country's 30 years of experience in the implementation of PPPs. Sánchez warned about the importance of political stability, and highlighted that the “country risk” is mitigated with policies sustained over time.

For her part, Ana Lucrecia Tovar, director of Group 14 (Professional Services) of the CCIAP, summarized the key points of the forum, highlighting the importance of the operation and maintenance of the assets that are achieved under the PPPs, the need for dialogue consensus for the adaptation of national regulations, the identification and management of risks according to the type of project, and the creation of departments and teams specialized in PPP.

The CAF mission at the forum was led by the representative in Panama, Lucía Meza, along with María Eugenia Miquilena, senior executive, and Kathleen Núñez, Country Office executive.