Chile has created diverse tools and infrastructure bonds to pay for the projects under concession.
Chile has pioneered the development of tools to support the financing of public works projects under concession, among which the following stand out:- Minimum guaranteed income and shared income- Exchange coverage (US$, Euro)- Income distribution mechanism, which allows the concessionaire partnerships to stabilize their revenue expectations in exchange for additional projects for the state. - Present value revenues, which constitutes a guarantee by making the duration variable of the concession more flexible to achieve a given income level. - Special public works collateral, which allows the financing of projects based on the rights awarded by the state.- Infrastructure bond, which facilitates participation by private agents in long-term financing. Currently the majority of concessionaire partnerships are financed with infrastructure bonds. The first issue was for the Talca-Chillan highway in November 1998 for US$ 116.5 million. Since that experience the market has grown in a sustained fashion, with a total of over US$ 3.76 billion issued so far and a potential of around US$ 4.135 billion considering the bond lines that have already been registered. The most recent bond issues have obtained historic placement rates of less than 3.4%.In addition to these bond issues, US$ 884 million in bonds have been issued on the international capital market, around US$ 335 million in securitized bonds on the local market and US$ 1.213 billion in financing through the local banking system, thus raising a total of over US$ 6.19 billion in long-term financing for the concessions system. This is evidence of the development of the infrastructure bond market and the growth in private investment in the sector, thus making it the main source of financing.
Estadio Coquimbo (Photo:MOP)