First Private Public Partnership Agreement in Guatemala’s history

Guatemalan Congress enacted Decree 18-2021 yesterday evening approving the first ever Private Public Partnership Agreement (PPP Agreement) in Guatemala’s history. The project consists on the restoration, administration and operation of the Escuintla – Puerto Quetzal 42 kms national highway as a toll road, which is fundamental for Guatemala’s economy. Additionally, the PPP Agreement provides for the operation of the toll road and ancillary works to guaranty the quality of such infrastructure during its’ 25-year term.

The approval of this PPP Agreement is a milestone accomplishment from diverse points of view. It is the first PPP in the country under the PPP Law approved in 2010, which incentives infrastructure development through the supervision and collaboration between the State but assigning risk and capital investment to the private company partner. In addition, it gives ANADIE, the government’s agency in charge of PPPs’ promotion and development, more strength and credibility that was somehow undermined due to the lack of PPP projects in Guatemala.  Lastly, it opens the door to other several and much needed infrastructure projects in ANADIE’s pipeline that will bring development and growth for Guatemala.

The investment to be made through CONVÍA, the project’s awarded consortium, will consist on US$80,000,000.00. The highway will operate as a toll road with payment exemptions and special toll tariffs for local residents in the area. As a PPP project, it will generate value revenues, as it has been designed for the investment costs to be specifically targeted and calculated in relation with the service to be provided to meet expectations and needs of its users.

We are optimistic about this historic date in Guatemala and congratulate our clients that are part of the awarded consortium.

Hopefully it is the first of much more PPP projects to come.