LatinFinance - July/August 2014 - 57

PARAGUAY | Infrastructure
Paraguay's infrastructure has suffered from years of neglect, but a new PPP framework
could bring change

Back to basics

Source: FLICKR by Nico Kaiser

P

araguay's government is going
back to basics with its program
to improve the economic and
investment environment: building up
infrastructure.
As a landlocked South American
country that has the ambition to become
a hub, and a re-export platform for the
sub-region, the country needs to boost its
transport logistics - and put an end to
power blackouts.
Such events are all the more grating
for locals, given Paraguay's abundance
of hydro-powered electricity generation
capacity, including the binational Itaipu
hydroelectric dam, one of the biggest in
the world, on the border with Brazil.
The country's infrastructure is well
under par by international standards.
"There is a huge deficit built over
decades of insufficient investment that
has put Paraguay among the 10 worst
quality public infrastructure in the
world," according to the World Economic
Forum.
The administration of President
Horacio Cartes looks determined
to address long-standing issues in
infrastructure. But it has no real
choice: shipping is dicey down the
main waterway, the Paraguay River;
Asunción's airport is widely considered
too small; roads outside the capital city
are underdeveloped.
The government has opened the door
to private investors, passing a new law
covering public-private partnerships.
A five-year plan leading to the end of
Cartes' presidential term in 2018 has set
the goal of an unprecedented $16 billion
investment package. Beyond that, the
planning ministry has been looking at
developments over a longer-term view,
of 30 years.
"We are coming from two decades of

RELEASING ENERGY: the Itaipu hydro-electric
dam on the Paraguay-Brazil border is one of
the biggest in the world

little investment in public infrastructure.
We are preparing to change this," says
Ramón Jiménez, minister of public works
and communications. "We have a very
aggressive agenda for development in
infrastructure that involves bringing in
the private sector to make part of this
investment."
Speaking from his cabinet ministry in
Asunción, Jiménez sets some ambitious
goals in an interview with LatinFinance:
"We want to move from less than $200
million a year in public investment to
somewhere between $1 billion and $1.2
billion per year [over the next 10 years],
starting next year."
This is key to support the country's
economic growt, he says. "Growth will
have a hard time being sustainable
unless we make a run for infrastructure
development in a very aggressive

manner. We want to send that out as
a big opportunity for national and
international companies, to participate
with various investment instruments to
pursue this objective.
"This year we will increase the public
works program to around $450 million.
Next year we want to reach $1 billion.
We are holding tenders for more than
$700 million this year and next year we
want that to exceed $1 billion. We need
investment of at least $1 billion per year
to make things work," he says.
Domestic and private investors have
been considering a catalogue of PPPs.
The government itself has identified key
priorities including an expansion of the
highways between Asunción and Ciudad
del Este, on the Brazilian border, as well
as another stretch between the capital
and the city of Encarnación, in the south.

July/August 2014 - L ATINFINA NCE.COM 57
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