CAF presents opportunities to finance and invest in integration infrastructure in Latin America during conference in Europe

Ministers of economy, finance and planning, representatives of the private sector and experts from Latin America and Spain will discuss opportunities for integration in Latin America by developing infrastructure and establishing logistics corridors, as well as the challenges and opportunities of project financing and investment programs at the upcoming CAF Conference: Infrastructure for the Integration of Latin America, to be held at Casa de America, Madrid, on July 16.

Luis Carranza, executive president of CAF-development bank of Latin America, and Santiago Miralles, Chief Executive Officer of Casa de America, will host the opening lecture of the conference, which will be divided into three sessions: “Infrastructure for integration and its impact on regional productivity”; “Financing infrastructure in priority sectors”; and “Promoting investment in infrastructure and logistics”.

The following delegates will discuss financing and investment opportunities in Latin America: Mariana Prado, Bolivian Minister of Development Planning; Esteves Pedro Colnago, Chairman of the Board of CAF and Brazilian Minister of Planning, Development and Management; Mauricio Cardenas, Colombian Minister of Treasury; Pilar Mas,Macroeconomic Analysis and International Economy Director of the Spanish Ministry of Economics and Business; Dulcidio de la Guardia, Panamanian Minister of the Economy and Finance; Lea Gimenez, Paraguayan Minister of Finance; Danilo Astori, Uruguayan Minister of the Economy and Finance; Salvador Marin, President of COFIDES; Joan Rosell, President of the Confederation of Employers and Industries of Spain (CEOE), and Juan Béjar, President of Globalvia, among others.

Guidelines for governments and local councils to make use of PPPs

Annual investments in infrastructure in the order of 5% of the gross domestic product (GDP) are needed to provide the networks and services required to ensure sustainable development in Latin America and the Caribbean. In recent years, public-private partnerships/associations (PPP or PPA) have played a major role in most countries in the region, particularly in the private sector in the area of construction, operation and maintenance of both economic and social infrastructure.

Planning and defining strategic investment has become a major challenge for the public sector, due to recent society demands (86% of people in Latin America should be living in urban areas by 2050), which may not always be satisfied by public spending. Therefore, in some cases it is necessary to call upon other means that involve collaboration with the private sector. All governments, including local administrations (city, county and state governments) have the opportunity to address some of these challenges by using PPPs to complement the management of the infrastructure and public services for which they are responsible.

CAF has published a document entitled"Public-Private Partnership in Latin America. A Guide for Regional and Local Governments”, establishing the basic definitions of PPPs, specifying tools that may be used to assess the use of the PPP model with regard to other possible formulas, and including a number of good practices and lessons learned that will help in drafting, renegotiating or organizing agreements to ensure proper governance.

Monica Lopez, Chief Executive of CAF’s Sector Analysis and Programming Directorate, and an expert in infrastructure, explained the benefits of PPPs and how local governments can make the most of them. “These associations call upon the technical know-how and management experience of the private sector to provide added value and greater technical efficiency throughout all the stages of a project (design, construction, financing, maintenance and exploitation) and, at the same time, are a source of additional funding for governments, because social infrastructure can be provided that the public sector could not otherwise provide due to budget constraints.”

Nevertheless, this model involves certain aspects that makes it quite complex to apply: the involvement of a large number of players, structured in the medium and long term, and difficulty in defining and managing agreements, which means that several frameworks (institutional, legal, technical and financial) need to be brought together. Therefore, the public sector must have the administrative capability to manage these projects.

These and other opportunities for financing and investing in Latin America will be discussed at Casa de America on July 16, from 8:30 a.m. to 2:15 p.m. . You will find the complete program of the event and may register on the event’s microsite.