Intelligence Series - Infrastructure

Infrastructure and COVID-19 in Latin America: Propelling Projects to Drive Recovery

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Intelligence Series Infrastructure

The coronavirus pandemic has slowed economic growth and hindered the advance of projects, but governments around Latin America are seeking to boost infrastructure programs precisely to help themselves out of the crisis. Are the plans adequate and will investors be interested? BNamericas’ infrastructure team takes a look at the situations in Brazil, Chile, Colombia, Peru and Mexico.


 Latin America’s infrastructure builders and operators have been battered by the coronavirus pandemic, and bolstering their recovery – and pushing ahead with new initiatives – will be a key element of the overall recovery the region’s economies will be seeking as we overcome the immediate health crisis.

Lockdowns restricting the movement and gathering of people have halted or slowed construction projects in most countries, and concession operators have been particularly walloped. Brazil’s airports, for example, saw passengers reduced by about 95% year-on-year in April.

And pressure on government finances as a result of the pandemic, as tax collection and GDPs slip, has raised the risk of payment delays to infrastructure projects in the region, exposing liquidity risks, according to Fitch Ratings.

“In some projects, liquidity requirements were underestimated and the longer than anticipated collection days results in unexpected stress on cash flows,” Fitch wrote in late May. Projects experiencing prolonged payment delays have turned to reserve funds, accrued dividends and delaying their own supplier payments to cover working capital needs.

Governments’ financial woes have sparked growing indebtedness as some states borrow to try to stabilize their economies, giving rise to a dilemma between raising infrastructure spending to stimulate the economy, or cutting committed spending to save, according to Richard Abadie, global leader of PwC’s capital projects and infrastructure group.

“Fiscal positions have deteriorated, but infrastructure needs have not. Narrowing the infrastructure gap just became even more challenging,” Abadie wrote in a World Bank blog post in May. “Past experience indicates that, when economic growth declines, so too does public investment. Yet, the pandemic will increase calls for increased spending.”

Indeed, a number of governments around Latin America are pushing ahead and even expanding infrastructure programs in the near term to underpin recovery. As countries look to launch projects under the “new normal,” ensuring the right risk-reward structures to entice investors will be more important than ever, as Adil Marghub, Latin America head for the infrastructure and energy sectors at the International Finance Corporation, notes in the Q&A below.

Regulatory changes are also under discussion in some countries to enhance private participation.

“The urgency of retaking the path of growth should motivate many emerging countries to implement reforms that support productivity, job creation and sustainable expansion,” Moody’s Investors Service VP Jaime Reusche said in an interview with Peru’s state news agency Andina.

In this report, BNamericas’ infrastructure team takes a look at the investment outlook for the sector in Brazil, Chile, Colombia, Peru and Mexico the context of the pandemic.


Table of contents

  • Introduction
  • Q&A: International Finance Corporation
  • Brazil Restructuring Projects to Attract Private Investment
  • Mexico Zeroes In on Emblematic Works
  • Chile's Double Challenge for Investment
  • Colombia Bets on 5G Infra Program
  • As Peru Reactivates Large Infra Initiatives, What of the Small Projects?

Companies and projects related to this report

  • Tonsejo Coordinador Empresarial
  • Agencia de Promoción de la Inversión Privada
  • Sacyr S.A.
  • Comisión Económica para América Latina y el Caribe
  • Fondo Nacional de Fomento al Turismo
  • Fedesarrollo
  • Agencia Nacional de Infraestructura
  • PricewaterhouseCoopers LLP
  • Banco Central de Chile
  • Moody's Corp.
  • The World Bank Group / Grupo del Banco Mundial
  • Tribunal de Contas da União (TCU)
  • Cámara Chilena de la Construcción A.G.
  • Ministerio de Transportes y Telecomunicaciones de la República de Chile (MTT)
  • Ministerio de Obras Públicas de la República de Chile (MOP Chile)
  • Ministerio de Hacienda de la República de Chile
  • Fitch Ratings, Inc.
  • Associação Brasileira de Concessionárias de Rodovias
  • International Finance Corporation (IFC)
  • Confederação Nacional do Transporte (CNT)
  • Comisión para el Mercado Financiero (CMF)
  • Banco Nacional de Desenvolvimento Econômico e Social (BNDES)
  • Agência Nacional de Aviação Civil (ANAC)Maya Train - Palenque-Escárcega Section (Stretch 1)
  • General Port Terminal San Martín de Pisco - Stage 2
  • Isthmus of Tehuantepec inter-oceanic train rehabilitation (Transistmic Train) - Medias Aguas-Salina Cruz Section
  • Dos Bocas refinery
  • Route 5 upgrade, Los Vilos-La Serena stretch
  • México-Toluca interurban train
  • Bogotá metro line No. 1
  • Guadalajara light rail no. 3
  • Felipe Ángeles International Airport - AIFA (Santa Lucía International Airport - AISL)
  • Jorge Chávez International Airport expansion
  • Salaverry port modernization: Phase 1
  • Ferrogrão railway
  • Oeste-Leste railway (FIOL)


Ariel RodrĂ­guez, Javiera Gracia, Rogerio Jelmayer

Laura Superneau

Pages (English Version)

Mexico Brazil Chile Colombia Peru