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US Treasury Releases Latin America Infrastructure Development Program Update

by Mike Godfrey, for LawAndTax-News.com, Washington

08 April 2008

The US Treasury Department has this week released updates on the progress of the Latin American Infrastructure Development Program.

In July 2007, Treasury Secretary Henry Paulson announced the creation of an infrastructure development program to increase investment in infrastructure projects in Latin America and the Caribbean.

The United States, in partnership with the International Finance Corporation (IFC), a member of the World Bank Group, is working to catalyze private investment in infrastructure in Latin America.

The goal of the program is to partner with the private sector to identify, structure and launch sustainable infrastructure projects.

The United States, Brazil, the IFC and the Inter-American Development Bank and other partners have contributed a combined USD12mn (the US contributed USD4.6mn) to date, with additional contributions of at least USD8mn envisaged in the next 1-2 years.

According to the Treasury, the contributions will be used to:

  • Help governments and private sector sponsors conduct market, technical, legal, and financial analyses in order to prioritize and design projects for development; and
  • Help governments manage transparent and competitive bidding processes.

The Treasury went on to provide a list of results to date. These included:

  • Twelve projects are signed or under advanced negotiations, with USD1.3mn committed from the initiative. The projects are located in Mexico, Brazil, Haiti, Colombia, Jamaica, and St. Lucia.
  • USD2.6bn (estimated) in additional investment will be leveraged across all twelve projects, USD450mn of which is greenfield investment.
  • Fiscal savings to local governments from these transactions are estimated at a minimum of USD200mn.
  • The number of people expected to receive improved basic services from these transaction are estimated at 500,000.
  • Eight advisory transactions are under execution; additional investment to be leveraged is estimated at USD2.3bn.

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