Infrastructure is one of the main areas related to the project finance market which the Costa Rican government is developing. Recent projects include the San José-Caldera road concession, the investment management contract for airport services at Juan Santamaria International Airport, the concession for the new passenger terminal building at Liberia International Airport, and the concession for the construction of a grain wharf at the Port of Caldera, with total investments in excess of $450 million.
Generally, lenders collateralise these loans by means of a general security agreement (a guaranty trust) covering real and personal property, account receivables, inventory and cash flows, among other assets. It is also possible to use separate security agreements over each type of asset: mortgages, pledges and/or the assignment of beneficial rights under certain contracts and, depending on the type of project, assets and rights that can be taken as security. The notarisation, registration and stamp duty, among other fees, will depend on the type of security, the secured amount and the assets involved in a particular transaction.
Costa Rican law does not make distinctions between national and foreign creditors regarding foreclosures, but it does make it, for example, regarding foreign participation in concessions in the maritime zone and in the Papagayo Touristic Area.
Submission to a foreign jurisdiction is legal, valid and binding, but Costa Rican courts exclusively have jurisdiction over disputes related to real estate and assets located in Costa Rica. Local courts recognise provisions requiring submission of disputes to international arbitration. International arbitral awards and judgments are recognised locally provided that an exequatur procedure and other local law requirements have been met.
The challenges and investment needs in infrastructure, energy and communications in Costa Rica and Central America forecast a promising future in this area.
Mario Quesada-Bainchini and Randall Barquero-León
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