Is PPP debt the next emerging asset class? I was struck by this thought following a recent trip to Latin America where I talked to a number of key people involved in public sector financing.
Latin America is increasingly turning to Public Private Partnership (PPP) structures – to fund big infrastructure, energy and health projects. According to the World Bank, 17 countries across Latin America have fully functioning PPP units, and PPP accounts for about 40% of the region’s yearly infrastructure commitments.
In many cases, the investment is huge. Take Colombia, the country is engaged in its fourth generation toll road programme (known as 4G for short), which comprises 179 projects. This has already involved some innovative
Peru has big projects in energy and transportation and recently updated the legal and institutional framework for PPP to help create higher quality projects. Argentina’s pipeline includes USD 169 billion of road programmes and USD 34 billion in the energy sector.