Private Enterprise and Financial Markets > Infrastructure and Financial Markets > Infrastructure
Infrastructure Finance Directory 1997
By Antonio Vives (02/97, IFM-101, En)
This Directory, the second that we have now published, describes some of the most significant infrastructure finance transactions that closed in 1996. It does not attempt to be comprehensive, and includes only those deals that can have a demonstration effect on others and even though geographical coverage is universal but with a strong bias towards Latin America and the Caribbean, as the major users are expected to be the officers and managers of the Inter-American Development Bank Group and officers, investors and sponsors of projects in that region. Nevertheless, it is expected that it can be of help to other bilateral and multilateral institutions devoted to infrastructure project finance and to sponsors, developers and financiers of these projects.
The Directory will include all projects that the Inter-American Development Bank and the Inter-American Investment Corporation finance in private infrastructure during the year, regardless of innovative features, but it will also include other infrastructure projects and financing vehicles that are considered trend setting, both from developing and from developed countries. The descriptions presented will emphasize those special aspects and it is hoped that these presentations will stimulate the search for more innovative ways to finance infrastructure projects and to a better understanding of the conditions that make a given financing instrument or structure possible.
This issue if full of deals from the region and in particular the 30 deals reported include five from Argentina, five from Chile and seven from Colombia, countries where there is the most private infrastructure activity. Some of those presented have been named Deals of the Year by some publication, like Samalayuca II, Aguaytia, El Dorado Airport, Petropower and Kern River. This issue sees a welcome development, and that is the intense use of the international capital markets in financing or refinancing operations. In particular this issue includes 13 such placements. Significantly, and also showing the maturing nature of private infrastructure in some emerging countries is the fact that many of the deals include operations without recourse to government or public entity guarantees, direct capital market financing for greenfield projects and operations without recourse to multilateral or bilateral umbrellas. For example, Petropower, a greenfield project, was able to issue bonds in the U.S. market without any governmental or multilateral intervention. Ibener put together a power plant without any purchase power agreements and no access to governmental, multilateral or bilateral cover. Endesa of Chile issued 100 year bonds and several projects were able to obtain ratings above those of the sovereign or the parent, like Transportadora de Gas del Norte in Argentina and Kern River in the U.S. It also includes the first project finance deal to raise local pension fund resources like MetroGas in Argentina. Still the overwhelming source of finance continues to be bank loans with some form of coverage, be it national government or from multilaterals or bilateral institutions, but the trends towards access to the international capital markets is an encouraging sign of maturity. We hope that in the coming years we see the move extend to the much needed local capital markets finance.
Antonio Vives
Division Chief
Infrastructure and Financial Markets
February 1997
1/ The descriptions presented have been prepared with the help of consultants, based on publicly available information that has been checked for accuracy. Nevertheless, the Inter-American Development Bank is not responsible for its content.
Last updated: 01/29/07
