CIC - Construction Intelligence Center

Is Argentina's PPP Program in Peril?

  • Published:Monday, July 02, 2018


PPPs are at the core of the Argentine government’s ambitious economic agenda to revamp its ageing infrastructure, but there are major risks to the continued implementation of such arrangements to finance large-scale projects.

 

Since taking office, the administration of President Mauricio Macri has taken several steps to restore market confidence and maximize investors’ interest in infrastructure development. Following the resolution of the sovereign bond default in 2016 and the implementation of a series of market-friendly measures, the government launched a number of infrastructure initiatives including Plan Belgrano for the country’s poorly connected north and significant sector plans such as the 2016-2019 transportation plan and the 2016-2025 renewable energy program.

 

However, while the new regulations surrounding PPP development in Argentina have significantly improved, several challenges remain. In early May, Nicolas Dujovne, the Minister of Treasury, announced the government will cut ARS30 billion (US$1.2) from its public works budget this year as part of austerity measures imposed by the Macri administration as it negotiated a US$50 billion credit line with the International Monetary Fund (MF). While the minister said that the cuts will not affect projects already underway, projects in earlier development stages would have to be funded by other sources of infrastructure financing.

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