Latin American project finance

Author: | Published: 27 Feb 2011

Multilateral agencies and ECAs’ affect on infrastructure finance structures revealed

The past two years have seen a resurgence of multilateral and export credit agency (ECA) activity in Latin American infrastructure financings. A combination of market and regulatory developments has created conditions ripe for these - plus local - sources of funding. The most obvious are of course the Basel III and Dodd-Frank reforms which, when combined with the fallout from the financial crisis, has stifled international commercial banks’ appetite to invest in the region’s long term projects.

But there are important changes at a regional level too. Projects are increasingly bigger and need more lenders, local markets are flush with liquidity, and there’s been a flurry of ECAs granted direct lending approval. Chile, Peru and Brazil also benefit from 10 to 15 year build-out plans based on their governments’ economic projections.

"That changes the whole dynamic of doing projects in...