Patricio Mansilla - Project Finance in LA
-
Upload
public-privatepartnership -
Category
Economy & Finance
-
view
676 -
download
0
Transcript of Patricio Mansilla - Project Finance in LA
Project Finance in Latin America
Public-Private Partnerships for Infrastructure
Development in Middle Income Countries: the
experiences of Chile and Peru
1
Patricio Mansilla
Chemonics International Inc.
Wharton Finance Conference
November 5, 2010
Agenda
1. Chilean Institutional Framework for PPPs in infrastructure
2. Key elements to facilitate PPP financing in Chile
3. Peruvian Institutional Framework for PPPs in infrastructure
4. Key elements to facilitate PPP financing in Peru
2
1. Chilean Institutional Framework
for PPPs in Infrastructure
3
4
Chile: Project cycle and
institutional structure
Chilean PPP Results: Investment
Type of Project Investment (US$ Million)
Interurban Roads 3,800
Urban Roads 2,500
Airports 350
Dams 140
Public Buildings 110
Jails 200
Railways 466
Ports 260
Total 8,000
Chilean PPP Results: Revenues
Ministry Revenues (US$ Million)
Ministry of Public Works 428
Ministry of Transport (Ports) 294
Total 722
Cost of PPP
Project Development
7.79.3
8.2
8.1
19.2
10.1
9.3
15
8.2
13.8
14.6
0
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Mil
lio
n $
1.8% of Total Investment
2.5 % Including Land Acquisition
Chilean PPP Results: Summary
Summary (US$ Million)
Investment 8,000
Revenues 722
Cost of Project Development 250
2. Key Elements to Facilitate PPP
Financing in Chile
9
10
DISTINCTIVE
ELEMENTS
EXPLICIT
GUARANTEE
DESIGNS
PROPER
RISK
ALLOCATION
Time
Revenues
T
Long Term Minimum
Revenue Guarantee
ACTUAL
REVENUES
11
DISTINCTIVE
ELEMENTS
EXPLICIT
GUARANTEE
DESIGNS
PROPER
RISK
ALLOCATION
Time
Revenues
P
ACTUAL
REVENUES
GOV. PAYMENT
TO
CONCESSION
Long Term Minimum
Revenue Guarantee
12Time (years)
Revenues
P
Actual
Revenues
50% Gov.
50% Conces
IMG
Revenue Sharing Mechanism
Rutas delPacífico S.A.
Sociedad Concesionaria
13
Santiago- Valparaíso Highway
(Toll Road US$3 for 100 km)
14
Rutas delPacífico S.A.
Sociedad Concesionaria
We put your savings in this road to
grow your pension fund
15
PPP Projects Operating in Chile
16
PPP Projects Operating in Chile
17
URBAN ROADSChili
FIRST
URBAN
CONCESSION
PROGRAM
SANTIAGO
AMÉRICO
VESPUCIO
SUR
COSTANERA
NORTEKENNEDY
NORTE-SUR
GENERAL
VELÁSQUEZ
US$440
Mill.
US$270
Mill.
US$290
Mill.
AMÉRICO
VESPUCIO
NORTE
US$ 250 mill.
18
Urban Road Concession: East-West
Urban SystemResults
•Investments: US$385 million
•Length: 42 kilometers
•Reduced gas emissions
•Reduced contamination
•Reduced congestion
•Reduced travel time from Las
Condes to the Santiago Airport
•Implementation of the “free flow” electronic toll road system which lets users
go through the road without stopping to pay tolls.
•The number of accidents in the road is very low—average of only 8 per month.
Costanera Norte
PPP Projects for 2010-2014
22
Year Investment Million $
2010 500
2011 1.900
2012 1.400
2013 2.300
2014 1.900
Total 8.000
3. Peruvian Institutional Framework
for PPPs in Infrastructure
23
24
TRANSPORT
MINISTRY AND
NATIONAL PORT
AUTHORITY
OSITRAN
Planning BiddingInvestment
and Operation
PROINVERSION
Regulation
•ENAPU
•PRIVATE COMPANIES
•CONCESSIONAIRIE
Peru: Project Cycle and
Institutional Structure
25
USAID Successful PPP Program in
Peru
26
Pucallpa
YurimaguasPaita
Lima
Economic Corridors facilitate new
business in Perú.
*IIRSA Norte
*IIRSA Central
*IIRSA Sur
*IIRSA Andino
Peruvian Economic Corridors
4. Key Elements to Facilitate PPP
Financing in Peru
27
28
Shadow Rating and Credit
Enhancement• Additional credit enhancement (i.e. partial risk
guarantee) is needed to improve the credit/risk profile
of the debt issue and attract long term institutional
investors
• AFPs in Peru purchase only investment grade bonds.
Minimum AA- (pe)
29
Amazon North Transaction Structure
MTC
Concessionaire
Special Purpose
Company (SPC)
Amazon North
Road Concession
Inter-American
Development
Bank
Bond
Issue
25 year
Concession
Contract
Trust
Road Improvements,
Rehabilitation ($220
m), and O&M
($15m/year)
Partial
Credit
Guarantee
Tolls
Domestic
Capital
Markets
MEF
Annual O&M
Payments
PAMO ($15 mill)15 annual
payments
PAO
($29 mill.)
PAMO / PAO
Coupon
Payments (i + p)
OSITRANRegulation
and
Supervision
($60 mill.)
CAF
Bridge Loan
US$60 million
IIRSA North Road
First PPP bond financing and Partial Credit Risk Guarantee (IADB)30
• A 25-year Concession Contract
to improve, rehabilitate, operate
and maintain 960 Km. of road
infrastructure between Paita
and Yurimaguas
• Initial investments:
– Phase I (years 1-2): US$ 95.0
million
– Phase II (years 2-4): US$
120.0 million
– TOTAL:
US$ 215 million
• Average annual O&M: US$
15.0 million
Estimated maximum
annual GOP
contributions
US$
Millions
Annual Payment for
Construction (PAO) for
10 years (end of year 2
through year 12)
US$ 29
Annual Payment for
Operation and
Maintenance (PAMO)
for 20 years
US$ 15
Selection criteria: the lowest
present value of the sum of the
PAO and PAMO payments
Project Description IIRSA North Road
31
32
Facilitating Project Finance and Construction risk
• In lieu of strong toll revenues, the GOP compensates theconcessionaire for construction progress with annual paymentsPAO prorated to the advance of works
• The GOP issues Construction Progress Certificates (CRPAOs)through the Ministry of Transport (MTC)
• Each certificate evidences an unconditional and irrevocableobligation of the GOP to make a fixed payment in U.S. dollars
• The concession agreement provides that CRPAOs are freelytransferable and that once generated they are not subject to anycondition or performance obligation relating the concessionagreement
• The concessionaire raised $214 million through the securitizationof CRPAOs in the international capital markets
33
Amazon North Financing
IDB PR
Guarantee
Source: FITCH Ratings
34
Facilitating Project Finance and Mitigating
Construction risk
• Bond holders do not take construction risk
• If construction fails to advance on schedule or isabandoned completely for whatever reason, CRPAOswould never be available for purchase, and thesecuritization would never be fully collateralized byCRPAOs
• This possibility does not create additional risk for note-holders, because in lieu of CRPAOs as collateral, thenotes will be backed by the CLN and a letter of credit,which together are expected to be sufficient to coveroutstanding obligations at all times
35
a) Increase in Demand (Port moves
more than 1 million TEU per year
and serves 80% of Peruvian foreign
trade)
b) Overruns, low productivity and
technological change
c) Negative externalities
d) $800 million in investments required
in Peruvian ports
Callao Port
Selection Process
• Criteria 1: The lowest tariff index consisting of the followingrates:– Standard Ship Services: US$ 0.70 per meter of the Ship Length/hour
– Standard Cargo Services. 20’ container: US$90; 40’ container:US$135
• Criteria 2: Additional Complementary Investments (ACI) inCallao Port common areas
• Winning Bidder: P&O Dover / Dubai Ports International andUniport S.A.
• In addition, the concessionarie will pay 3% of the annualgross revenues to the National Port Authority and 1% to theTransport Investments Regulator (OSITRAN).
36
37
Container Terminal- Callao Port
Many Thanks!
38