Public-Private Partnerships: Where Would They Work Better?

Guatemala, El Salvador and Costa Rica are the countries in the region with the best conditions to develop Public-Private Partnerships, followed by Honduras, Nicaragua and Panama.

Thursday, May 23, 2019

The 2019 Infrascope index, which evaluates 23 indicators and 78 qualitative and quantitative sub-indicators in Public-Private Partnerships (PPP) in Latin America, is prepared by The Economist Intelligence Unit and has the financial backing of the Inter-American Development Bank (IDB).

The report explains that institutional frameworks and resources for project preparation are strengths for Guatemala, the best-positioned Central American country with a 74 out of 100 rating. In terms of transparency, Guatemala's PPP agency publishes documentation of all phases of PPPs online, and Guatemala is one of the four Latin American countries that publishes project evaluations online.

The document states that "... El Salvador's score for Institutions has declined since 2017, placing the country in sixth place in the overall ranking, just below Guatemala. Unlike Guatemala, El Salvador lacks a project development fund, although its PPP agency has a budget to guide the preparation, contracting and implementation of PPPs. El Salvador's score in the Regulations category also showed a slight decrease compared to 2017 because of the lack of a national infrastructure plan.

Although Costa Rica ranked seventh with El Salvador in the Institutions category, its scores have improved, while those of El Salvador have decreased. In fact, Costa Rica was the country that improved the most in the category, thanks to a stable PPP agency and an independent project development fund, financed by the Inter-American Development Bank.

However, further improvements are needed for Costa Rica to achieve parity with the countries that have the best results in this category, such as increasing transparency and accountability by publishing more information and evaluations of projects online, and improving the capacity of the PPP agency to conduct evaluations.

Nicaragua improved its score in the Business and Investment Climate category, although this increase was overshadowed by a decrease in its Financing score. The new regulations were issued in 2016 and 2017, and public statements by government officials have demonstrated their support for PPPs. However, there is no evidence of multiparty support, the local capital market does not have tools such as green and impact bonds, and institutional investors have no interest in facilitating the financing of PPPs
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See full report.

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More on this topic

Panama: PPP Bill to Third Debate, but with Changes

September 2019

The removal of the disqualification from hiring natural and legal persons who have been sentenced for corruption is one of the most important changes made to the bill that creates the Public-Private Partnership Regime.

Although the bill has faced multiple obstacles, since a few days ago its discussion in the Assembly was suspended because workers and union sectors rejected the original bill, it was approved in the second debate, but with some changes.

PPP Law Discussion Suspended

August 2019

After the workers and union sectors rejected the bill creating the Public-Private Partnership Regime in Panama, the Assembly decided to suspend its discussion in the second debate.

Responding to the request to extend the period of consultations by a sector of the country, the plenary of the National Assembly suspended discussion of the second debate of Bill 12, which creates the Private Public Association Regime (APP) as a tool for the development of private sector investment, social and job creation, reported the government on August 27, 2019.

Public-Private Partnerships Not Being Leveraged

December 2017

In the four years that the law of associations between the State and private companies in El Salvador has been in effect, not a single infrastructure project has been able to materialize using this business scheme.

Although there are at least seven infrastructure projects that were initially proposed as being those with the highest priority and ideals to be developed under the public-private partnership scheme and with funding from Fomilenio II, none of them has managed to materialize. 

Draft Law on Public Private Partnerships Presented

January 2012

The Salvadoran Presidential Secretariat has presented a draft Law on Public-Private Partnerships to the Legislative Assembly.

A press release from the President of El Salvador states that:

“The Technical Secretariat of the Presidency presented this week a draft Law on Public-Private Partnerships (PPPs) as a tool to enhance public and private investment, generating growth and economic development in El Salvador.

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