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Uruguay Creates US$350m Infrastructure Fund

26 October 2016

(Latin Finance) Uruguay has announced the creation of a US$350m financial trust fund to help fund public-private partnership infrastructure projects in one of Latin America’s most stable economies.

The 30-year fund is aimed at helping provide partial financing for companies interested in investing in infrastructure projects over the next five years, according to a government statement.

“This is a modern financial instrument that in the Americas only exists in Colombia and now Uruguay,” said Pablo Ferreri, Uruguay’s economy undersecretary. “It brings together funding for companies that are participating in public-private partnership investments with those who have the ability to make funds available.”

Development bank CAF, through subsidiary CAF-AM, will administer the fund and track the projects until completion. CAF-AM will also participate in discussions before the launch of any PPPs to ensure the concession contracts are bankable, a CAF statement said.

Uruguayan investors including pension funds and a state-owned insurance company provided most of the funding for the new trust through the local stock exchange, and CAF contributed 10%, CAF said.

The South American country plans to invest US$12.5bn in infrastructure investments over the next five years. The government hopes to use PPPs for US$2.1b in projects across the housing, roads, railways, ports and energy sectors.

Last month, a source familiar with CAF’s plans told LatinFinance the Uruguayan fund is looking to invest in three road PPPs, one railroad, up to three wind farms and one education project.

CAF has also outlined plans to create infrastructure funds in Argentina, Brazil and Peru, according to another person familiar with the development bank’s plans.