Infrastructure Investment: The Big Shortfall
As LatAm stares down a growing list of infrastructure needs, builders and governments hope private lenders return. The only certainty is multilateral and state lending.
by Ben Miller
Brazil’s 2014 World Cup and 2016 Olympics grab headlines, as do multibillion dollar national infrastructure investment plans. However, most of the deals that have to happen are still only being talked about and the actual flow of committed capital is relatively small.
LatAm has woeful roads and dreadful ports, even by emerging markets standards. Mexico’s creaking ports and airports leave it dependent on exports to the US, while Brazilian growth is thwarted by poor networks. Other countries face similar challenges in getting their goods out and fulfilling the economic potential touted by so many this decade.
Funds are available. A lack of bankable projects and incentives for the private sector has kept investment away, leaving much of the heavy lifting to government sources such as Mexico’s Banobras and Brazil’s BNDES. Ambitious infrastructure plans have been revised, as the continent risks falling short of its goals...
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