P3 in Guatemala: The Path Forward

In 2010, the Guatemalan Congress approved the Ley de Alianzas para el Desarrollo de Infraestructura Económica or “Law of Alliances for the Development of Infrastructure”) (the “P3 Law”), establishing the country’s regulatory framework for implementing public-private partnerships (“P3”). Today, Guatemala continues to attest its commitment towards infrastructure delivery and development under a P3 model.

Earlier this year, the Guatemalan P3 agency (Agencia Nacional de Alianzas para el Desarrollo de Infraestructura Económica –ANADIE) awarded the first project under the P3 Law to Consorcios Autopistas de Guatemala. Consorcios Autopistas de Guatemala is a joint venture between Mexican company Marhnos and Guatemalan developer Grupo Pecron. The project agreement provides for a 25-year agreement and a US$80M investment for the rehabilitation, operation, and maintenance of a 41.2km long toll-road connecting Escuintla and Puerto Quetzal, Guatemala’s most important maritime port located in the south Pacific coast of the country.

Following ANADIE’s successful implementation of its first procurement process under the P3 Law, expectations are high and the toll-road project is being watched closely as it will set precedent for other expected P3 projects under ANADIE’s pipeline. On October 8, ANADIE submitted the agreement to Congress for its approval. The P3 Law does not impose any time limit for Congress to approve or reject the agreement.  If it is approved, the first P3 project in the country will enter into effect. However, if Congress rejects the agreement, not only will Consorcios Autopistas de Guatemala have to be compensated in accordance with the P3 Law, but P3 development in Guatemala may be delayed as investors assess the county’s political risk.

 

 

Veronica Orantes

Associate

vorantes@qil4.com