Infrascope shows environment for PPPs is improving as rising demand for infrastructure prompts countries to seek greater private investment
Chile, Brazil, Peru, Mexico and Colombia are the countries in Latin America and the Caribbean most able to carry out sustainable public-private partnerships (PPPs) to develop infrastructure and increase access to basic services, according to the third edition of the Infrascope.
The report analyzes national environments for PPPs in the Latin American and Caribbean region. It was produced by the Economist Intelligence Unit (EIU) and commissioned by the Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group.
The environment for PPPs is improving in the region as rising demand for infrastructure prompts countries to redouble efforts to attract greater private investment. The gap between emerging and developed PPP readiness is narrowing. As a result, the report shows that a cluster of countries have improved their capacity and readiness for PPP investments. The top refomrer group is led by Colombia, Uruguay, Guatemala, Costa Rica, El Salvador, all of which have accelerated regulatory change and capacity building.
Moreover, the continued demand for infrastructure has contributed to the rise of PPP units and specialized agencies to promote and implement PPP investment over the past two years. Since 2010, three countries— Guatemala, Honduras and Uruguay—have added new PPP units or agencies, with four more underway. Strong institutional frameworks and a positive investment climate prove to be fundamental to managing PPP investments.
“The evidence demonstrates that when PPPs work well for inclusive growth when they are designed according to best practices and backed up by strong laws and regulations,” said Nancy Lee, General Manager of the MIF. “We ate the MIF are focused on working in frontier markets for PPPs—poorer countries, subnational governments, and sectors with less PPP experience such as the social and green technology sectors.”
For more detailed regional results visit infrascope.fomin.org.
For the first time, this year’s edition also highlights the opportunities for “green” PPPs as a growing and innovative area in the region. The PPP framework represents a unique opportunity for governments to attract private sector investment in domestic green industries, and to encourage the development of new approaches to mitigating environmental impact.
“Increasingly, the region is seeing the PPP model being applied in an array of green projects such as renewable energy, as well as emerging social sectors such as health and education. The MIF has recently launched a new advisory service that will help build country capacity to deploy PPPs in these sectors,” said Carrie McKellogg, chief of the MIF’s Access to Basic Services and Green Growth unit.
The Infrascope is an interactive learning tool and benchmarking index that assesses countries’ readiness and capacity for sustainable, long-term PPP projects, scoring aspects of the regulatory and institutional frameworks; project experience and successes; the investment climate; and financial facilities in 19 countries in Latin America and the Caribbean. It can be downloaded for free at infrascope.fomin.org and allows users to self-score using indicators and changing weights to reflect dynamic country circumstances. Companies engaged in PPPs may also use the tool to compare frameworks and evaluate risks across countries.
About the MIF
The Multilateral Investment Fund (MIF) supports private sector-led development benefitting low-income populations and the poor - their businesses, their farms, and their households. As an experienced actor and partner with practical knowledge on a local level, the MIF has organized programs throughout the region to improve regulatory frameworks, and to increase the capacity of governments to develop and implement PPPs for infrastructure and basic services.
Since 2004, the MIF has leveraged $20 million in 19 technical cooperation projects, serving as a catalyst for an additional $671 million in private investment and more than $4 billion in anticipated future investments through PPPs.