The project pipeline presented by the government seeks to accelerate the consolidation of the first Public Private Partnership (PPP) project in response to the large infrastructure deficit that is currently present in Paraguay.
The Government has listed a group of 10 projects declared as priority projects of public interest to be developed under the PPP scheme. Among them, 2 road projects, 1 airport, 1 local train, 1 waterway, 3 projects of sewerage and effluent treatment, and 2 social infrastructure projects (a penitentiary and probation center) are counted.
This pipeline, however, represents only - according to official estimates - 20% of the projects that the government has decided to launch in the coming years. The other 80% will be implemented through traditional public works, public financing and multilateral agencies. Significant development of private initiatives under the PPP law is also expected.
With respect to either scheme, the priorities are spread. First, extending the so called “soy route” (route along which 80% of the grains leave the country) and the new airport terminal in Asuncion, both to be executed as PPPs. In addition, the local train that connects Asunción with Ypacaraí and the BTR (bus rapid transit) of Asunción; are all on the first page of the presidential agenda. Of Course these are not the only projects in a short term that will begin the process of procurement.
Paraguay meets most of the critical factors to implement a successful program of infrastructure: economic stability, strong government support and a genuine partnership proposal.
The current challenge is to address the public sector, investors can manage the processes, presenting attractive business cases and motivate the appetite of the international financial sector, considering the relative depth of the local system, will undoubtedly give its vote of confidence the proposal of Paraguay.
Regardless of the first project being a route, an airport or social infrastructure such as a hospital or prison, what truly matters is that will be the first project developed under the PPP Law, and as such unique. It will be the first with all eyes on it and which will the test preparation of the government to face such an ambitious project pipeline that looks attractive to international investors.
It is our belief that this is a unique opportunity to explore potential business opportunities in Paraguay.