Key trends for PPPs in Latin America PPPs in Brazil after the Olympics

A - Key trends for PPPs in Latin America

1 ! PPPs have played a central role in infrastructure policy in the Latin American Region

Estimated private sector investment Average: 32% Average: 38% Source: ppi.worldbank.org/

Number of Projects in the PPI database Source: ppi.worldbank.org/

Projects in lac per sector (ppi data base >1991 – 2015) Source: ppi.worldbank.org/

2 ! PPP programs in the LAC region have been under continuous reforms over the last 20 years

Infrascope results (regulatory environment) Argentina Uruguay Guatemala Mexico Honduras Colombia Source: infrascope.fomin.org/

Key issues and topics for the region Institutional Design Unsolicited Proposals Sources of Financing

Key issues and topics for the region Empowerment of finance ministries in the project cycle, Independent Project Preparation Facilities, Institutional Design Unsolicited Proposals Sources of Financing

Key issues and topics for the region New processes for increased effectiveness Need for an alignment with infrastructure policy Institutional Design Unsolicited Proposals Sources of Financing

Key issues and topics for the region Diversification of SPV Capital structure Sophistication of risk allocation schemes Institutional Design Unsolicited Proposals Sources of Financing

3 ! The lessons of LAC should be confronted with other experiences to accelerate the region’s learning curve

B - PPPs in Brazil after the Olympics

Total investment in Brazil (ppi database) Source: ppi.worldbank.org/

PPP Contracts signed (with government support) Source: www.radarppp.com

Projects Initiated (with government support) Source: www.radarppp.com

1 ! PPPs in Brazil account for a significant part of the infrastructure investment, and are increasing rapidly

The porto maravilha project and the preparation for the olympics

The porto maravilha project and the preparation for the Olympics City of Rio PPP contract (BOT) SPV

The porto maravilha project and the preparation for the Olympics City of Rio PPP contract (BOT) SPV Signed nov/2011 Building new streets and tunnels Plant 15k trees Availability Payments Build the Museum of Tomorrow Build 650k m2 of sidewalks Capex of ~US$3 billion Source: www.radarppp.com

The porto maravilha project and the preparation for the Olympics City of Rio PPP contract (BOT) SPV Signed nov/2011 Building new streets and tunnels Plant 15k trees Availability Payments Fund with real state assets owned by the municipality of Rio de Janeiro. The Fund is guaranteed by the city’s treasury Build the Museum of Tomorrow Build 650k m2 of sidewalks Capex of ~US$3 billion Source: www.radarppp.com

The porto maravilha project and the preparation for the olympics

The Olympic park as the main venue for the games 16 sports 1.180.000 m2 8 main arenas The International Broadcast Centre Food courts and live centre Estimated capex of US$500 million Source: www.radarppp.com

The Olympic park as the main venue for the games City of Rio PPP contract (BOT) SPV Source: www.radarppp.com

The Olympic park as the main venue for the games City of Rio PPP contract (BOT) SPV Building all sports and supporting facilities Maintenance and soft services during and after the games Source: www.radarppp.com

The Olympic park as the main venue for the games City of Rio PPP contract (BOT) SPV Availability Payments Building all sports and supporting facilities Maintenance and soft services during and after the games Source: www.radarppp.com

2 ! PPPs in Brazil have successfully been used to address a very diverse set of social demands

Trends and Chalenges for the future of PPPs in Brazil Institutional Design Unsolicited Proposals Sources of Financing

Trends and Chalenges for the future of PPPs in Brazil Small PPPs in social sector will continue to form the largest pipeline in the country Institutional Design Unsolicited Proposals Sources of Financing The subnational level will continue to be the protagonist How to design effective institutions and build capacity in the local level?

Trends and Chalenges for the future of PPPs in Brazil Unsolicited proposals have been very ineffective in Brazil (~15% conversion) Institutional Design Unsolicited Proposals Sources of Financing The local authorities are by far the most active in welcoming UP How to design effective institutions and build capacity in the local level?

Trends and Chalenges for the future of PPPs in Brazil BNDES is retracting as the most relevant lender for PPPs Institutional Design Unsolicited Proposals Sources of Financing Private banks might demand more government support and guarantees How to identify and manage fiscal consequences adequately?

Trends and Chalenges for the future of PPPs in Brazil Corruption in the infrastructure industry will continue to make to the headlines How to transform PPPs into a effective tool against to corruption? How to adapt transparency standards to avoid corruption in PPPs?

! 3 Building capacity in the local level, keeping fiscal consequences low and fighting corruption should be the focus of the regulatory reforms to foster more and better PPPs in Brazil

1- PPPs have played a central role in infrastructure policy in Latin American 2 - PPP programs in the LAC region have been under continuous reforms over the last 20 years 3 - The lessons of LAC should be confronted with other experiences to accelerate the region’s learning curve 1 - PPPs in Brazil represent a significant part of the infrastructure investment, and are increasing rapidly 2 - PPPs in Brazil have successfully been used to address a very diverse set of social demands 3 - Building capacity in the local level, keeping fiscal consequences low and fighting corruption should be the focus of the regulatory reforms to foster more and better PPPs in Brazil