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Public-private partnerships offer smart transportation solutions for Latin America and the Caribbean

From bikes to apps, new report highlights region’s challenges and opportunities

PUNTA DEL ESTE, Uruguay — Increased urbanization and economic growth have resulted in congestion and pollution in Latin America and the Caribbean but alternative transportation solutions, financed by public-private partnerships (PPPs), can improve the quality of life and protect the environment, according to a new study.

Smart Mobility PPPs in Latin America and the Caribbean, produced by the Economist Intelligence Unit and commissioned by the Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, was released today at the PPPAmericas Conference, the leading event on trends in PPP projects in the region.

“Public transportation and infrastructure haven’t caught up with the pace of population and economic growth in Latin America and the Caribbean,” said David Bloomgarden, MIF lead specialist in Access to Basic Services and Green Growth. “With more than 80 percent of people living in cities, smart mobility solutions will be critical to boosting prosperity and improving the quality of life for all faced with chaos, pollution and traffic congestion.”

According to Smart Mobility PPPs, the region now has the highest rate of urbanization in the developing world. This has led to many problems like overcrowded public transport, pollution, and increasingly longer commutes in both big and small cities –but has also spurred exploration of mobility alternatives.

From bikes and bus rapid transport systems to electric cars and traffic-tracking apps, countries in the region are implementing smart mobility solutions that are becoming increasingly popular. For instance, there are bike-sharing programs in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Uruguay. In addition, Latin America accounts for nearly two-thirds of the world’s bus rapid transport passengers.

Such smart mobility solutions often include the participation of both private businesses and government agencies through public-private partnerships, which are also used for financing large-scale initiatives such as metro systems and highways. In all, Latin America and the Caribbean account for 11 percent of global investment in PPPs.

The report notes that the most popular transportation-related PPPs involve private sector technology that could not otherwise be offered by the state, and those that promote green technologies. Some, like bike-sharing, while increasingly popular, still remain limited: In Bogota, the city with the highest percentage of bike users in the region, only 5 percent of daily trips are completed using this means of transportation.

PPPAmericas, the leading conference on trends in PPP projects in Latin America and the Caribbean, is organized biennially by the MIF. The 2015 conference is taking place in Punta del Este, April 13-15 under the theme of “Scale and Credibility: Taking PPPs to the Next Level.”

About the MIF

The MIF, a member of the Inter-American Development Bank (IDB) Group, is funded by 39 donors and supports private-sector-led development benefitting low-income populations and the poor—their businesses, their farms, and their households. The aim is to give them the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. A core MIF mission is to act as a development laboratory—experimenting, pioneering, and taking risks in order to build and support successful micro, small, and medium-sized business models.