Manager selected for Peruvian Infrastructure Fund

(Special, September 28, 2009).- The consortium formed by Brookfield (International) and AC Capitales (local) was selected as manager of the Infrastructure Fund of Peru.

The Fund is part of the coordination activities agreed by the government of Peru, the Inter-American Development Bank (IDB) and the Andean development Corporation (CAF) when they signed on March 31, 2009 a Memorandum of Understanding to structure mechanisms to facilitate the financing of infrastructure projects in this country with private sector participation.

The objective of the Fund is to exploit the long-term opportunities which appear on the horizon, most of which will require a fund manager with great ability in structuring and setting up businesses.

The Peruvian government's awareness of the importance of private participation in the financing of infrastructure projects resulted in this first initiative to promote a capital fund with contributions from government, IDB and CAF, but managed on a private profit basis, and applying the best international practices, with participation of domestic private saving and foreign capital.

Selection process

As part of the coordination activities, IDB and CAF invited organizations with international experience in the setting up and managing of private capital infrastructure funds to enter the selection process for the Fund Manager.

The winner was selected through a private competitive process. The invited institutions were advised to associate with local firms for the process. The final choice was made from three candidates which met the requirements of the selection criteria.

The selection of the winning consortium was based on the credentials and experience of the candidates. The winning Brookfield-AC Capitales consortium has broad experience and recognition in structuring investments in infrastructure projects at international and local level in emerging markets.

The members of the consortium agreed to invest up to US$100 million in the capital of the fund, subject to the respective approvals. With an initial capital of US$500 million, the Fund is expected to be structured as a private capital fund under Peruvian law. The Fund will use its resources to support development of projects and companies mainly in the transport, energy, water and sanitation, communications and logistics sectors.

The Peruvian government, through the Ministry of Economy and Finance (MEF), IDB and CAF may consider contributing funds or providing finance to the Fund, subject to integrated analysis of each operation by the institutions, their respective policies and approval of the competent internal bodies, including the executive boards of each organization. This financing will be increased by contributions from local and international institutional investors.

IDB is the main source of multilateral financing for Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for its non-sovereign guaranteed operations, which include loans and credit guarantees for private and public sector entities.

The mission of the Ministry of Economy and Finance is to design, propose, execute and evaluate, on an efficient and transparent basis, the economic and financial policy of Peru with a view to achieving growth as the basic condition for sustained economic development and the general wellbeing of the population.