26 April 2019

Public-Private Partnerships as an alternative for infrastructure development

Investment in infrastructure and public services represents one of the biggest challenges for Latin American and Caribbean countries. According to the Interamerican Development Bank, during past decades the public infrastructure investment represented around 5% of the region’s Gross Domestic Product. Currently, this investment represents less than 3% per year.

Due to the growing needs of the population and budgetary restrictions that national and subnational governments face, Public-Private Partnerships (PPP) emerge as an alternative development and financing mechanism to increase public investment levels and provide quality services to the population.

The consolidation of this mechanism faces important challenges, especially for subnational governments, since the lack of knowledge, experience and PPP units reduces the ability to identify, structure and bid projects, as well as supervising them in construction and operation phases. It represents a great opportunity for the private sector to diversify its investment portfolios and get involved in new development areas.

For this reason, is important to continue the promotion of these investment schemes, therefore it opens possibilities for both, public and private sectors in the development of productive public infrastructure.

Luis Mayorga Muñiz, President of Auren Holding Mexico

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