How to negotiate LatAm public concessions

Author: Danielle Myles | Published: 6 Dec 2011

The restructure and refinancing of Costa Rica’s airport expansion is a rare example of how to negotiate concession rights in a politically sensitive project and region.

Aeris Holding’s operation of the Juan Santamaria International Airport concession became final in September when it closed $100 million of financing from Overseas Private Investment Corporation (OPIC) and Inter-American Development Bank (IADB).

The new concession was awarded after the original concessionaire defaulted on its construction and financing obligations to International Finance Corporation (IFC) and a group of B lenders. This, combined with concurrent litigation and restructuring of Quito’s international airport, heightened the political sensitivities of privatising public assets in the region.

"As this involved a public concession, the government was monitoring every step of the way what was being done," said Jaime Mercado, a partner with Simpson Thacher & Bartlett who acted for airport operator Aeris.

The September financing marked the end...