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Panorama Internazionale

24 APRILE 2019

19:42 - Argentina

ARGENTINA: IDB AND PRIVATE BANKS WILL INVEST US$ 900 M TO REACTIVATE ROAD WORKS

(ICE) - ROMA, 24 APR -

Through a loan led by the IDB Invest, the private division of the Inter-American Development Bank, the trust created by the Government will receive as of June the us$ 900 million necessary to reactivate the 6 public highway works tendered with the public private participation system (PPP).

On April 30, the IDB has a date to discuss the "bridge loan for the PPP program, highway network and secure routes," according to its website. The bank would contribute us$ 200 million, while the rest would be added between international banks -such as JP Morgan, Goldman Sachs, HSBC, Deutsche Bank, Citibank and UBS- and multilateral organizations -such as the International Finance Corporation (IFC, the World Bank arm). for the private sector), the Development Bank of Latin America (CAF) and the Development Bank of China (CDB).

The Ministry of Transport called representatives of the 5 consortiums responsible for carrying out the works to inform them that the trust fund would be available in mid-May. For this, some modifications to the contracts will have to be made, since originally the first year of works was going to be financed in pesos with the local bank. For the next 3 years of construction, the consortiums will be able to go out and sell the investment payment securities (TPI), which the Treasury delivers against the progress of the works.

The multilateral body validated the framework of integrity with which the banks that will lend financing to the contractors will be governed, a necessary requirement to cover the "reputational risk" for possible corruption cases. In this framework of such demanding integrity, the employer is obliged to transfer his shares in 30 days if he has a final judgment, firm prosecution or repentance. The idea is to separate the company from the entrepreneur, so that it can continue to operate while the composition of its shareholders is being cleaned up. This was the kick-off for IDB Invest to invest in a syndicated loan. The bank has a portfolio of us$ 11,200 million in assets under management and 330 clients in 23 countries.

For the Government, the reactivation of the PPP works came at the best time, since they will be worth about us$ 900 million in public works just when the purpose for that had a real 50% drop compared to 2018, due to the need to lower public spending and meet the goal of fiscal balance. The credit will be distributed in proportional parts among the 6 highway corridors at market rates in dollars.

(ICE BUENOS AIRES)