Latin America: Costa Rica seeks to advance road plan through PPPs

07 September 2018 - 12:00 am UTC

Costa Rica announced an ambitious USD 4.6bn road PPP plan, according to a 6 September press release.

The total capex of the projects that it wishes to advance, totals USD 4.6bn and will include at least six highways as PPPs, Inframation understands.

The plans form part of Costa Rica’s “Plan for Economic Reactivation” which were presented by the country’s President Carlos Alvarado Quesada.

According to the release, “These projects will be financed with already existing credit facilities yet to be used and will advance through the PPP modality, which will not generate pressure on public finances”, government Minister Edna Camacho stated. 

Government officials had not immediately responded to requests seeking confirmation that it intends to procure all the mentioned projects through PPPs.

This comes as multiple market sources said the political will has before been a deterrent to PPPs advancing in Costa Rica, given that country has existing PPP and concession laws. The current administration assumed office on 8 May 2018.

A portion of the plan will be funded through USD 350m of credit from IDB Invest. The executive assembly will send the legislative assembly a bill to reassign the line of credit to projects that will be part of the road PPP plan. This includes the following:
–    USD 50m for works relating to the San José – San Ramón Highway. USD 40m for this project will come from Coanvi – a government body overseeing road operations. USD 650m for this project will come from a trust with the BCR (The National Bank of Costa Rica);
–    USD 50m for the San José – Cartago Highway (The project capex is around USD 400m in total);
–    USD 50m for the San José – Limon Highway;
–    USD 200m for the San Carlos Highway

The government intends to also advance the USD 450m “Route 27” San José-Caldera highway project. The same document states that this would be funded with “private investment”, without further clarity.

Separately, IDB Ivest will support the San José– Río Frío highway with USD 3.5m for pre-feasibility studies, while USD 500m for the project is expected to come from private sources.

 

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