Latin Infrastructure Quarterly - Issue 6

XXXXXX XXXXX Latin Infrastructure Quarterly 1
Latin
Infrastructure
Quarterly
Exclusive interviews to Jorge
Quijano, CEO of the Panama
Canal Authority and Roberto
Roy, Executive Secretary of
the Metro de Panamá
Analysis of the renewable energy
and port terminals sectors
Contributions from senior
executives at CAF and Astris
Finance
PANAMA EXCLUSIVE
The IADB and the Reventazón
Hydropower Plant
Jorge
Quijano
Profiles:
OSX, OAS Soluções Ambientais & Latin
American Partners
Mining and Infrastructure
in Argentina

Letter From the Editor
T
his issue features a comprehensive coverage of the in-
dustry in a very active country, Panama. I would like
to thank the professionals at Latin Markets for their
timely introductions to the speakers of their upcoming
Panama Capital Projects & Infrastructure Forum. I conducted
interviews to high-profile representatives of critical infrastruc-
ture sectors in that country: the Panama Canal, the Metro de
Panamá, renewables, logistics, and financial services. I was
able to confirm what the market and industry players are say-
ing about Panama: this is an open economy with the appropri-
ate sector-specific policies and frameworks. On a related note,
I was impressed by the project implementation capacity shown
by some state authorities. The way they have procured, financed
and are currently monitoring the construction of the Línea 1 of
the Metro and the expansion of the Panama Canal seems to be in
line with best practices around the world.
Editor’s observations
The last quarter was an exciting one for infrastructure in Latin
America. Practitioners received news of relevant developments
almost on a daily basis. I would like to share with you some
observations arising from going over our weekly “News &Anal-
ysis” and recalling some of the conversations that I had with
practitioners on industry matters.
Maritime movements
The port terminals sector had a busy quarter. We read about op-
erators looking to expand their presence in Latin America, facil-
ity expansions projected or under way to adapt to bigger vessels,
Contributors
Bergoglio, Teseo
Co-Owner and Co-Managing Partner, Latin American
Partners
Carassale, Gian Franco
Senior Investment Officer, Inter-American Development
Bank
Croston, Juan Carlos
Vice-President Marketing, Manzanilo International Terminal
de Araujo Gagliano, Ulisses
Senior Partner, Nelson Wilians Advogados Associados
Flossbach, Federico
Senior Executive, Confederación Andina de Fomento
García, Juan
Critical Infrastructure Consultant
Graziano, Luis Felipe
Legal Manager, OAS Soluções Ambientais
Hanono, Alejandro
President and CEO, Hidrotenencias & Director at Empresas
Vicsons
Leal Gondo, Gustavo
Partner, Nelson Wilians Advogados Associados
Pereira Guimarães, Cesar
Partner, Justen, Pereira, Oliveira & Talamini Advogados
Associados
Perez Pire, Rafael
Executive Director, Unión Eólica Panameña
Pezzuti, Andrés
Quijano, Jorge
CEO, Panama Canal Authority
Romero Adame, Cinta
Collaborator at ALOMON, SLU
Roy, Roberto
Executive Secretary, Metro de Panamá
Sastre, Julián
Senior Partner & Head Projects at S3 Transportation
Spindler, Paul
Kingston Smith LLP
Toro, Juan
Director, Astris Finance
Villalobos, Federico
Senior Financial Analyst, E3 Capital Costa Rica
Villeneuve, Stéphane
Vice-President at SNC Lavalin
Zarate, Juliana
Kingston Smith LLP
To our readers:
Welcome to the 6th issue
of Latin Infrastructure
Quarterly. In this letter,
besides introducing you to
this very exciting issue, I will
offer some brief observations
of several relevant industry
developments that occurred
during the last quarter.
Latin Infrastructure Quarterly2

Latin Infrastructure Quarterly 3Letter From the Editor
governments announcing large investments and tender process-
es, and suppliers publicizing big contracts signed with operators.
Asian “stakeholding”
During the last quarter we witnessed strong interest from Asian
countries such as China and Japan in expanding their “stake-
holding” in LatAm infrastructure. This interest was expressed by
acts from government-related entities. This is important. First,
because it is common for private sector companies from that far
away region to look at their respective governments’actions first
in order to allocate resources anywhere. And second, in the case
of China, because of the important role State-controlled players
have in its infrastructure industry. To conclude, we should high-
light and commend the role played by the multilaterals acting
as platforms for investments in our region. They have shown
to have the structuring expertise, knowledge of the region and
economic and human resources to be an adequate platform to
canalize Asian resources into our region.
Similarities between infrastructure and football
in Brazil
As a write this letter, o futebol Brasileiro is currently building
up for a new season with continuous announcements of players
being traded. However news of problems in the different clubs
tends to cast a shadow on those related to players that generate
so much excitement in the fans.
Something similar has happened with the infrastructure in-
dustry during the last quarter in the largest market in our region.
The good news came with the numerous governmental actions
to foster financing through promoting infrastructure bonds, tax
exemptions announced for asset-backed funds that focus on in-
frastructure projects and the regular investments / lines of credit
announced by the BNDES (an interesting piece of very recent
news, that sort of went unnoticed, was the restructuring of part
of the BNDES’s debt conducted by the Brazilian treasury). The
problematic news came in the form of labor matters, State inter-
vention in critical concessions in the energy sector, and adminis-
trative and judicial proceedings extending more than reasonably
in time.
Extra observations (in a few lines)
An interesting development is the recent creation of a private
sector company in the water and sanitation sector in Brazil, sim-
ilar to the one featured in this issue. Both these companies are
sponsored by important infrastructure players and have ambi-
tious growth plans in a sector that has usually remained under
State control.
Sector professionals and organizations talk about the conve-
nience of having more airports in Brazil and in Mexico. Airlines
ask for them as well for competition purposes. Passengers de-
mand effective sector policies and efficient services. Regional
and international operators have shown that they are ready and
willing to embark in new projects. All is set for 2013 to be a
busy year for this sector in those countries.
A lot of movement in the PV and wind sectors with financing
being announced by sponsors, private equity and multilaterals in
projects in Peru, Chile and Brazil.
I hope you enjoy the issue.
Best regards and have a great 2013!
Patricio Abal.
Editor
patricio@liquarterly.com
1.202.446.7367
@LIQEditor

Latin Infrastructure Quarterly4 Sponsors

5Contents
Contents
Issue Focus: Panama Exclusive
ThePanamaCanal..................................................................................................6
CAF’sInvolvementinPanama.............................................................................13
A look at Panama’s Hydropower Sector.............................................................18
Infrastructure Finance Advisory in Panama...................................................... 22
Manzanilo International Terminal......................................................................24
The Penonomé Wind Farm.................................................................................28
The “Metro de Panamá”.....................................................................................31
Sectors
The IADB and the Reventazón Hydropower Plant............................................36
Company Profile: OSX.......................................................................................39
Mining and Infrastructure in Argentina...............................................................42
Costa Rica: Paving the Road for a PPP Reform.................................................46
Development of a Public Bicycle Rental Scheme – The Seville Case-Study....48
Company Profile: OAS Soluções Ambientais....................................................54
Medida Provisória 595: Changes in the Port Sector Regulation in Brazil...........58
SNC Lavalin’s Outlook of Colombia..................................................................66
Colombian National Infrastructure Agency Captivates Executives in Toronto..67
Strengthening the Not-For-Profit Sector in Colombia.........................................70
How Good is Your Site Security / Emergency Response Plan?...........................74
Private Sector Engagement and the Brazilian Myth of Fast Paced Growth..........76
LatinAmerican Partners......................................................................................78

Latin Infrastructure Quarterly6 Institutions
THE
PANAMA
CANAL
What are the Canal’s main sources of
revenues?
The Canal derives its revenues mainly
from providing transit services to ship-
pers and shipping lines that move cargo
through the route to reach producer and
consumer markets in an expeditious and
reliable way.
Primary sources of Panama Canal reve-
nues include Canal tolls and other marine
services. In addition, the sale of water
and electricity also provide important
streams of revenue. Even though transits
might have slightly decreased throughout
the years due to increase in vessel size,
total Canal revenues have continued in-
creasing due to rising cargo volumes.
LIQ talks to Jorge Quijano, CEO of the Panama Canal Authority
Has the worldwide economic slowdown
affected the Canal’s revenues?
The waterway registered a slight decrease
in tonnage during fiscal year 2009, but since
then, it has resumed growth, with fiscal year
2012 setting a record of 333.7 million of
PC/UMS tons, an increase of 3.6 percent
compared to fiscal year 2011. Toll revenues,
at B/.1,852.4 million, increased 7.1 percent,
as a result of larger vessel transits. In terms
of transiting vessels, fiscal year 2012 regis-
tered 14,544 transits, a small 0.95 percent
decrease from the previous year, with Pana-
max vessels recording 7,241 transits, 56.3
percent of oceangoing vessels. Total cargo
through the Canal registered 218.1 million
long tons, a slight 1.9 percent decrease over
the previous year.
What are the alternatives to the Pana-
ma Canal?
There are several alternatives to the Panama
Canal around the world, and two which
stand out: the US intermodal corridor and
theCapeofGoodHope. BothservetheEast
Asia – East Coast US route for container
vessels, the Canal’s most important market
segment. The US intermodal corridor im-
plies a partial land route, with vessels from
Asia unloading their cargo at several Pacific
Coast ports in the United States. The cargo
is subsequently distributed to locations in
the Midwestern and Eastern United States
by rail/truck transport. Meanwhile, sailing
around the Cape of Good Hope provides an
all-water alternative that is used by lines,
mainly, in the return voyage.

Latin Infrastructure Quarterly 7Institutions
What are your thoughts on the project
to revamp the Guatemalan railroad
system to link the Atlantic and Pacific
oceans sponsored by Korean firms?
From what we have read in the news,
this railroad project seems to be part of
a larger effort by the Guatemalan gov-
ernment to develop a “technological cor-
ridor” running north-south through the
country. The government plans to build
a whole infrastructure network consist-
ing of port facilities, oil pipelines, a four-
lane, 372-kilometer highway in addition
to a parallel railroad, entirely through the
private sector. The ACP considers that
any project that facilitates trade and trans-
portation will be beneficial to the region,
under correct estimates and premises of
their market demand and supply.
Let´s discuss the Expansion Program
(the «Program»). What works does the
Program entail and what is the current
status?
The Panama Canal Expansion Program
consists of the construction of two new
sets of locks - one on the Pacific and one
on the Atlantic side of the Canal. Each
lock will have three chambers with wa-
ter-saving basins. Total progress for the
locks project is currently at 36%.
The program also entails the widening
and deepening of existing navigational
channels in Gatun Lake and the deepen-
ing of Culebra Cut, currently recording
82% progress, and the deepening and
widening of the entrances to the Canal on
the Pacific and Atlantic sides, with 97%
and 99% progress, respectively.
In order to open a new 6.1 km-long
access channel to connect the Pacific
locks and Culebra Cut, four dry excava-
tion projects were designed. The first
three have already been concluded and
the fourth phase currently registers 69%
progress. Additionally, the Expansion
The waterway registered a slight
decrease in tonnage during fiscal
year 2009, but since then, it has
resumed growth, with fiscal year
2012 setting a record of 333.7
million of PC/UMS tons.

European Investment Bank (EIB) $ 500 M
Japan Bank for International Cooperation (JBIC) $ 800 M
Inter-American Development Bank (IDB) $ 400 M
International Finance Corporation (IFC) $ 300 M
Latin American development bank (CAF) $ 300 M
Total financing: $2,300 M
Estimated costs for the Expansion Program are:
(in millions)
Design and build of the Third Set of Locks $ 3,585 M
Pacific Access Channel $ 477 M
Navigational channels improvements $ 800 M
Water supply improvements $ 71 M
Management & Contingency $317 M
Total $5250 M
Program will improve the Canal´s water
supply by raising Gatun Lake´s maxi-
mum operating level by 45 centimeters.
As of November 30th, the total prog-
ress recorded for the overall Expansion
Program was 50%.
For a program of this magnitude, how
important is there for a state policy to
be in place regarding the administra-
tion of the Canal to keep short-term
politics maneuvers from obstructing
the project?
This is of paramount importance, not only
for the expansion, but for all activities un-
dertaken by the Panama Canal Authority.
The Panama Canal has its own organic
law, which was included in the Panamani-
an Constitution after being ratified by two
consecutive administrations. The Canal is
acknowledged by all Panamanians as the
nation’s principal asset, and its organiza-
tional structure guarantees the concept of
vital enterprise for world commerce and
for Panama. To date, after its transfer to
the Republic of Panama, the Canal has
executed its role and regulations in com-
pliance with article 310 of the National
Constitution which bestows in it the com-
mitment to manage, operate, preserve,
maintain, and modernize the waterway, in
a safe, uninterrupted, efficient and profit-
able manner.
In what ways will the Canal’s services
be enhanced upon the completion of
the Program?
The expanded Canal will improve the
Canal capacity to satisfy an increasing
transit demand with an adequate level of
service for every segment. Allowing the
transit of postpanamax vessels will re-
duce the number of transits required to
transport the forecasted cargo volumes.
This, in turn, will lower operation costs
and decrease the amount of water used in
the current locks.
Can you provide us with a breakdown
of the main costs of the Program?
See Figure 1.
How is the Program being financed?
The Panama Canal Authority signed
agreements with a group of bilateral
and multilateral financing institutions to
procure financing of up to $2.3 billion
required to complete the expansion of
the waterway. With the authorization of
Panama’s national Cabinet Council, the
Canal Board of Directors proceeded to
sign financing agreements with these in-
stitutions as in figure 2.
How did you procure the main con-
struction works?
The procurement for the construction
of the major projects was accomplished
through open public tenders. These bid-
ding processes were based on best price
and best value, whenever a more thor-
Figure 1
Figure 2

ough analysis and weighed assessment
of technical proposals were required, in
addition to the best price. The design-bid-
build approach was implemented for the
majority of the construction projects and
the design-build approach for the most
comprehensive, complex ones. The ACP
analyzed several options to better allocate
the associated risks of each project. In the
case of the Third Set of Locks Project,
after the design & build model was se-
lected, individual meetings with the bid-
ders were scheduled to acknowledge their
input before receiving the proposals.
Was the ACP involved in the design of
the works or was it left to outside firms?
For the Third Set of Locks, the ACP
worked along with external consultants
in the elaboration of a conceptual design
- which was provided for the bidding pro-

The Panama Canal Expansion Program consists of the
construction of two new sets of locks - one on the Pacific
and one on the Atlantic side of the Canal.

cess- on which the bidders could base
their proposals. All dredging and dry ex-
cavation contracts were designed by the
ACP. The 2.3 kilometer dam that will
separate Miraflores Lake from the new
postpanamax channel was designed by
URS Corporation.
What are some of the unexpected is-
sues that had to be resolved during the
execution of the Program?
Unexpected issues are associated with
external conditions, which can indirectly
affect the works, such as strikes by syn-
dicated local construction workers and
changes in local laws. Also, working with
multinational consortia has proven to be
a challenge.
How are the environmental aspects of
the Program being handled?
The environment is a priority under the
Expansion Program. Along with its con-
tractors for each component, the Canal
requires the implementation of environ-
mental mitigation measures through a
dedicated management system in compli-
ance with applicable regulations. For ex-
ample, wildlife rescue and relocations ac-
tivities are conducted as work progresses
in all areas in which projects are executed.
Mammals, reptiles and birds have been
rescued and relocated to safe areas. Re-
forestation projects with native species are
also being conducted by the ACP and in
close coordination with the national envi-
ronmental agencies. In this regard, to date,
over half a million trees have been planted
in 626 hectares. The Expansion Program
management also includes an agreement
with the Smithsonian Tropical Research
Institute for the location and assessment of
paleontological findings within the project
areas. In addition, regular contact is estab-
lished with the communities in the vicin-
ity of each of the projects to ensure that
project impact is reduced to a minimum.
All environmental activities are subject
to independent auditing by local environ-
mental organizations and all international
financing institutions.
Why do you think Panama is attract-
ing so much interest from international
infrastructure players?
The program also entails the widening
and deepening of existing navigational
channels in Gatun Lake and the
deepening of Culebra Cut.

Currently, Panama is experiencing major
infrastructure investments in addition to
the Canal Expansion Program. A proj-
ect to develop a metropolitan subway
system, the expansion of Tocumen In-
ternational Airport and improvements to
Panama City’s metropolitan road struc-
ture are among the top civil projects cur-
rently under execution. Furthermore, its
international banking center along with
increasing airline connectivity makes
it convenient for investors to establish
themselves locally and operate at lower
costs. Panama has maintained a steady
rate of economic growth in the last de-
cade, even in the midst of the current
harsh worldwide financial crisis.
The Panamanian economy has ex-
panded by more than 8% annually since
Jorge L.Quijano is the CEO of the Panama Canal Authority,the autonomous
agency that manages the Panama Canal, the leading interoceanic water-
way that serves world maritime commerce.
Jorge L. Quijano began his professional development in the Texaco Oil
Refinery in Panama, where he worked as a Process Engineer and Prod-
uct Forecaster. He started his career with the Panama Canal in 1975 and
climbed through the professional and managerial promotion ladder to the
position of Maritime Operations Director in 1999, the largest department
of the Canal organization, directly involved in the operation and mainte-
nance of the principal infrastructure and equipment of the waterway.
As Maritime Operations Director, he was responsible for transit sched-
uling, vessel inspection, admeasurements, pilotage, tugs, launches and
line-handler services,lockage operations and maintenance,central inven-
tory management and motor transportation, emergency and contingency
management (industrial fire fighting and hazmat response), as well as ac-
cident investigations. Under his leadership, the Department of Maritime
Operations obtained the ISO 9001 Certification issued by Det NorskeVeri-
tas in May 2001 and subsequent re-certifications.
In September 2006, was designated to manage the Panama Canal’s
$5.25 billion Expansion Program; and to that effect, he was appointed
Executive Vice President of the Engineering and Programs Management
Department. Under the Expansion Program, he headed a group of pro-
fessionals in charge of contracting and managing: the Locks Design and
Construction contract,the Atlantic and Pacific entrance channels dredging
contracts, the contracting of four dry excavation contracts to create a new
6.1 kilometer inland channel in the Pacific end of the Canal,the Lake level dredging to be performed by the Panama
Canal Authority´s workforce and other smaller support contracts.
A native of Panama City, Republic of Panama, Jorge L. Quijano is a graduate of the industrial engineering school
of Lamar University in Beaumont, Texas, and holds a Master of Engineering Degree in Industrial Engineering and
Management. He is also a graduate of Executive Management Programs, both in the Federal Executive Institute,
Charlottesville,Virginia, and the Northwestern University, Chicago, Illinois. He lives in Panama with his wife, Marcia,
and their two children.
year 2000. Growth is particularly strong
in the area of services, which accounts
for nearly 80% of the country´s GDP.
Most of the growth is attributed to a
series of policies of privatization, open-
ness, and transparency that have been
implemented since the year 2000. New
trade agreements, in particular with the
US, are also opening a series of oppor-
tunities for new players, which require
infrastructure.
Nevertheless, the principal driver
has been the Canal expansion, which
is not only increasing the opportuni-
ties for world commerce but is enhanc-
ing Panama´s Logistic Hub capabilities
throughout the world. In this spirit, we
can say that shippers and shipping com-
panies are discovering opportunities to
optimize operations by taking advan-
tage of Panama´s strategic location and
its logistic/transportation infrastructure,
which includes highly efficient ports in
both oceans, a transisthmian railway as
well as air and land connectivity. At
this point in time, when the US econo-
my is growing at sub optimal levels and
most of Europe is in recession, Panama
provides a good opportunity for retail,
exports, and transportation companies
to optimize operations by realigning
supply chains at a geographical location
that has the best connectivity through-
out the region in addition to be a secure,
reliable and efficient transportation
route.

Latin Infrastructure Quarterly 13Infrastructure Financing
Why do you think that Panama is at-
tracting so much interest from interna-
tional infrastructure players?
The Republic of Panama is one of the
Latin American economies that have had
one of the highest growth rates in the last
10 years. In 2011, the growth rate of Pan-
ama’s GDP was 10,6% which was high-
er than the average of 8,4% economic
growth for the previous 5 years. It is also
expected that the growth rate in Panama
for 2012 will one of the highest in Latin
America. The engines of growth of Pan-
ama’s economy have been a) the growth
in internal demand which has been fueled
by public and private investment in infra-
structure projects and b) a rise of export of
goods and services mainly through an in-
crease in the activity in Colon’s Free Tax
Zone as well as through the expansion of
the shipping activity of the Panama Canal
CAF’s
and an increase in financial services pro-
vided to non residents in Panama.
Taking into consideration Panama´s
GDP growth potential and the current
expansion and upgrade of new infrastruc-
ture projects, Panama has caught the at-
tention of infrastructure players who want
to assist Panama in the modernization
and upgrade of its existing infrastructure
platform. In that respect companies are
looking for opportunities at infrastructure
projects in roads and highways, ports and
airports, energy projects, subway, hotels,
the Panama Canal as well as water and
sanitation projects, among others.
What are the main State policies be-
hind infrastructure development in
this jurisdiction?
The Government’s strategic plan for the
years 2010-2014 has identified four en-
gines that will contribute to the growth of
the GDP in the range of 6 to 9 percent on
a yearly basis. The mentioned engines are
logistics, tourism, agriculture and finan-
cial services.
In order to attain the GDP growth po-
tential, major infrastructure needs of the
logistics and tourism growth engines
have been identified:
Logistics:
1. finalize the expansion of the Panama
Canal
2. expand and improve existing roads
and highways
3. expand air cargo capacity
4. reduce inland transportation costs;
Tourism:
1. improve the transport connectivity
of regional airports, roads and high-
ways, and marinas
2. improve the water supply and sanitation.
LIQtalkstoFedericoFlossbach,SeniorExecutive
at Confederación Andina de Fomento
involvement in Panama

Latin Infrastructure Quarterly14 Infrastructure Financing

In that respect
companies are
looking for
opportunities at
infrastructure
projects in roads
and highways,
ports and
airports, energy
projects, subway,
hotels, the
Panama Canal
as well as water
and sanitation
projects, among
others.
In order to achieve the above men-
tioned goal the development agenda iden-
tified in the strategic plan calls for: a) the
enhancement of the planning capabilities
of the Central Government, b) the im-
provement of the capacity of the public
entities, c) the development an adequate
legal and regulatory framework, d) the
enhancement in the coordination of in-
frastructure projects among the various
players (public and private, regional gov-
ernmental authorities and central govern-
ment authorities), and e) the development
of human capital to fulfill the identified
tasks.
In what ways does the CAF contribute
to the development and financing of in-
frastructure in Panama?
CAF contributes to the development and
financing of infrastructure in Panama in
many different ways. Regarding funding
needs of infrastructure projects, CAF´s
strategy in Panama has been to assist
projects with long term financing in the
following sectors: roads and highways,
energy, the Panama Canal, urban mas-
sive transport, and social infrastructure in
water and sanitation. CAF has extended
facilities to the financial sector through
short and medium term lines of credit to
facilitate banks to fund their trade financ-
ing as well as working capital needs.
CAF has also given Technical Assis-
tance to public and private projects in
Panama. In landmark projects CAF has
assisted the private and public sector
through its Technical Assistance program
in the conception and formulation of the
project from the onset of the project.
Such an approach has ensured the finan-
cial, economic and social viability of the
project.
The CAF´s approach to the financ-
ing of infrastructure projects is based on
promoting self-sustaining infrastructure
projects that assure economic develop-
ment while taking into consideration en-
vironmental and social aspects as well the
point of view of relevant stakeholders in
the project. CAF also looks at the genera-
tion of positive economic externalities in
the projects that it funds.
In the financing of infrastructure proj-
ects CAF has aimed to incorporate joint
financing opportunities with other Mul-
tilateral and Bilateral Institutions as well
as other Financial Institutions (Banks and
others) in order to promote the flow of
funds to Panama.
What is CAF’s infrastructure portfolio
in Panama?
CAF´s infrastructure portfolio includes
the financing of sovereign and private
projects in Panama.
City. The estimated cost of the project is
US$ 1,880 million. The debt portion will
amount to US$ 1.956 million out of which
CAF will participate with US$ 500 mil-
lion. The second project is phase 1 and 2
of the “Saneamiento de la Ciudad y Bahia
de Panamá”. This project has a total esti-
mated cost of US$ 906 million where the
debt portion will be up to US$ 627 mil-
lion. In this project CAF is participating
with US$ 296 million of the debt portion.
In the private sector CAF is partici-
pating in the financing of the expansion
of the Panama Canal. The estimated to-
tal cost of the project is US$ 5.250 Mil-
lion, where the debt portion will amount
to US$ 2.300 million and where CAF is
participating with up to US$ 300 million
in the total debt financing. The second
private sector project is the financing of
Electron Investment which is the Hydro-
electric Plant of Pando Monte Lirio in the
province of Chiriquí. The total project
cost amount to US$ 292,6 where the debt
portion will be US$ 183.4 million and
where CAF is participating with a Senior
Tranche of US$ 25 million and a subor-
dinated Debt Tranche of US$ 15 million.
The financing of the expansion pro-
gram being implemented by the Autori-
dad del Canal de Panamá (Panama Canal
Authority) had multiple sources and was
signed during the midst of the financial
crisis that affected the world markets
back in 2008, who were the sources and
how was it structured?
The expansion of the Panama Canal
had a corporate finance structure since
it was based on the repayment capacity
of the Panama Canal Authority. Never-
theless because of the sheer size of the
expansion project relative to the balance
sheet size of the Panama Canal Author-
ity at that time, the financing structure
had many elements of a limited recourse
project financing. The total cost of the ex-
pansion program amounted to US$ 5,250
million and the debt portion amounted
to US$ 2,300 million with a tenor of 20
years, a disbursement period of 6 years
and a grace period of 10 years.
The following banks are the lenders to
the Panama Canal expansion program: a)
the Japanese Bank for International Co-
operation (JBIC) made a commitment for
US$ 800 Million, b) the European Invest-
ment Bank (EIB) made a commitment for
In the sovereign sector, CAF is sup-
porting two flagship projects in the coun-
try. The first one is the financing of the
1st line of the Metro system in Panama

US$ 500 Million, c) the Interamerican
Development Bank (IDB) made a com-
mitment for US$ 400 Million, d) the In-
ternational Finance Corporation made a
commitment for 300 Million, and e) CAF
made a commitment for US$ 300 Million.
As of September 2012 the construction
progress of the expansion of the Panama
Canal has reached about 44,5% and it is
expected to be completed and commis-
sioned by August 2014.
What were the financier’s main con-
cerns given the context?
The closing of the financing took place in
2008 amidst the outset of the worldwide.
As you know the financiers to the expan-
sion program were Multilateral Banks
who fulfilled their role of being lenders
of last resort at times of crises. One of the
concerns of the lenders at that time was
the likelihood that the real sector could be
impacted by the financial crises and the
potential effects it could have on the ex-
pansion of the Panama Canal.
The main concern was that trade flows
among countries could diminish radically
and that the use of the Panama Canal could
be affected by the worldwide crises. Given
the fact that the financial crises has been
managed in a reasonable manner and that
the real economy has not been affected on
a worldwide scale or in a profound way the
usage of the Panama Canal has not dimin-
ished and has risen in recent years.
In that sense the implementation of
the expansion of the Panama Canal has
proven to be a timely project and will
contribute to the economic development
of Panama and will serve expanding trade
flows in the world.
CAF is also the main financier of the
“Metro de Panamá” project, what are
the main characteristics of the financing?
Indeed, CAF is currently participating in
the construction and future commission-
ing of Line 1 of the Metro of Panama,
which consists in the construction of a
metro line of 13,7 kms with 12 substa-
tions. In its first phase, the Metro line
will be able to connect the San Miguelito
neighborhood in the northeastern part of
the city with Albrook in the southeastern
part of the city, where the interurban bus
terminal of Panama City is located. The
total project cost amount to US$ 1.880
million, it has several financiers and will
improve the urban mobility of Panama
City.
CAF is participating in the financing
through two separate loans. The first one
has been approved and subscribed in 2011
is for the amount of US$ 400 million and
the second loan has been approved in No-
vember of this year and is for US$ 100
million, and will be subscribed in due
course.
With these two credits CAF´s partici-
pation in the total financing amount to
26,6% of total project costs. It is expected
that a substantial part of both loans will
be disbursed in 2013. The loans have a

sovereign guarantee in place and will be
executed by the “Secretaría del Metro de
Panamá», which is the corresponding au-
thority for the execution and commission-
ing of the project.
The resources have been earmarked to
finance civil works, rolling stock, trains
and wagons, environmental and social
costs as well as the supervision of the
project. Additionally part of the resources
can be used to perform independent stud-
ies by consultants that might be necessary
to assure the commissioning of Line 1 of
the metro, which is earmarked for the first
trimester of 2014.
Besides the financing provided to the
Metro project, CAF also provided
technical assistance, what kind of as-
sistance?
When the Government decided to imple-
ment the construction of a Metro system
for the Metropolitan area of Panama,
CAF joined forces with other financing
entities, to finance through Technical As-
sistance funds the feasibility of the con-
ceptual design studies of Line 1 of the
Metro in Panama. These studies which in-
corporated technical, economical and so-
cial and environmental aspects were used
for the tender offer process as well as the
contractual framework of the project.
The financing also includes an assessment
of the effects that the commissioning of
the Line 1 of the Metro will have and the
actions that have to be implemented with
other public transport systems that oper-
ate in the city.
CAF commitment and involvement
with the project continues and, as of to-
day, CAF is currently in conversations
with the “Secretaría del Metro de Pan-
amá” to evaluate its continued support of
the project as well as its involvement in
the future expansion of the system. CAF
is also contemplating to participate with
proposals for safety measures along the
rail line of the 1 Line of the Metro.
There is another recent infrastructure
related project financed by CAF called
“Saneamiento de la Ciudad y la Ba-
hia de Panamá”, what works does this
project entail?
This project has two main objectives. The
first one is to improve the sanitary con-
ditions of low income neighborhoods in
order to diminish the contamination of ur-
ban rivers and effluents through the con-
struction of a drainage system. The sec-
ond objective is to recuperate and clean
the bay of Panama through the construc-
tion of a waste water treatment plant for
the city of Panama.
The project will be developed by the
Health Ministry and will have a sover-
eign guarantee. The expected total cost
of the project is US$ 538 million. The
Government has committed funds to the
Project in the amount of US$ 58 million
and the remainder is being be provided
by Financing Institutions and Multilateral
Institutions. CAF has committed a loan
to the project in the amount of US$ 120
million.
The project will have a second phase
in order to expand the initial reach of the
project. The total estimated cost of the
second phase is US$ 308 million and the
amount that has been approved at CAF is
US$ 176 million
F
ederico R. Flossbach,
is a Senior Executive
in the Representative
Office of Corporación
Andina de Fomento (“CAF”) in
Panamá where he is responsible
to manage CAF´s client relation-
ships and identify new business
opportunities for CAF´s private
sector arm in Mexico, Central
America and the Caribbean.
Previously he was the Senior
Executive officer for the private
sector in Brazil out of CAF´s pri-
vate sector office in Sao Paulo.
Here he was responsible to
open CAF´s private client office
in Sao Paulo which helped es-
tablish CAF´s footprint in Brazil.
Initially he worked at CAF in Ca-
racas in the Project Finance unit
structuring transactions in the
energy, telecommunication and
transportation sectors.
Before joining CAF, Mr. Floss-
bach worked at Chase AG in
Frankfurt, Germany a subsidi-
ary of The Chase Manhattan
Bank where he worked in the
Structured Export Finance De-
partment. At Chase he was re-
sponsible for originating, struc-
turing and distributing cross
border transactions. Mr. Floss-
bach earned a B.S. in Econom-
ics degree from the Instituto
Tecnológico y de Estudios Su-
periores de Monterrey (ITESM)
in Monterrey, México, an MBA
in Finance from the American
Graduate School of Internation-
al Management (Thunderbird)
in Glendale, Arizona, as well
an Advanced Management Pro-
gram Degree from Haas Busi-
ness School at Berkeley Univer-
sity in San Francisco, California.
In the private sector CAF is participating in
the financing of the expansion of the Panama
Canal. The second private sector project is the
financing of Electron Investment which is the
Hydroelectric Plant of Pando Monte Lirio in
the province of Chiriquí.

Latin Infrastructure Quarterly18 Company Profiles
Panama’s economy has been grow-
ing steadily at high rates, what are the
main sources of electricity in the Coun-
try and what are the national authori-
ties doing to keep up with the increas-
ing demand?
Since 1997, when the Power Sector was
restructured, electric energy production
has been the responsibility of multiple
enterprises. Initially, most of these where
of mixed ownership, state and private, but
since the restructuring took place most of
the new capacity added to the system has
been private investment. About 10% of
the total capacity is owned by the Panama
Canal Authority, which is state owned.
As for the sources of primary energy,
approximately 60% is hydroelectric and
the balance is thermoelectric, mostly ob-
tained through heavy fuel oil, some light
fuel oil and a coal fired plant.
AlookatPanama’s
hydropowersector
LIQ talks to Alejandro Hanono,
President and CEO of Hidrotenencias
The guiding policy for the Panama-
nian authorities during this period has
been the free market rules established in
the reorganization laws of 1997. There
is a clear correlation between increased
investments during the periods when the
authorities have shown support of the free
market and diminished investments when
the signals have not been clear.
To keep up with the increasing de-
mand, ETESA (Empresa de Trasmisión
Eléctrica, S.A.), which is 100% state
owned, is calling for bids for long term
Power Purchase Agreements. Two of
them will take place in the first quarter of
this year (2013).
Who are the main players in Panama’s
energy sector?
Panama’s electrical distribution is han-
dled by geographical exclusivity conces-

Latin Infrastructure Quarterly 19Company Profiles
sions. Two companies hold these conces-
sions and both are of mixed ownership
with the state holding 49% of the stock.
The private companies holding the 51%
in each case are Gas Natural Fenosa, from
Spain and Empresas Públicas de Medellin
from Colombia. The transmission system
is owned and operated by a state owned
company.
Regarding the generation subsector,
actors are very dispersed. AES Corpora-
tion has the largest participation with (i)
its 49% stake in AES Panama SA which
owns a 481 MW hydro plant and (ii) sole
ownership of AES Changuinola which
owns a 222 MW hydro plant. SUEZ-GDF
has 51% ownership of BLM Corp., a 280
MW thermal facility, and sole ownership
of SUEZ-GDF Balboa 87 MW thermal
and a 60 MW hydro complex. ENEL has
49% ownership of Fortuna a 300MW
hydro plant. There are also other impor-
tant Central and South American groups.
How developed is the hydropower sector?
Panama currently has 1231 MW hydro
capacity on line. In addition there are
some 540 MW under construction. By
most accounts this is a bit more than
half the total hydroelectric capac-
ity available. There are still some im-
portant projects, such as the 200 MW
Changuinola II, that have to be devel-
oped but evidently most of the easy
affordable hydro has been developed
already. What lies ahead will be more
difficult and more expensive.
Please describe the regulation affecting
the power generation sector.
To develop a hydroelectric resource the
developer has to obtain a concession.
This is a rather lengthy process that starts
with requesting authorization to study
a site. The developer must perform an
environmental impact study, have it ap-
proved by the environmental authorities
and obtain the water rights required for
the hydroelectric development. Once all
the requirements are met a concession is
awarded usually for a 50 year period. The
project can then begin construction.
As for the sources of primary energy,
approximately 60% is hydroelectric and
the balance is thermoelectric, mostly
obtained through heavy fuel oil, some
light fuel oil and a coal fired plant.

Latin Infrastructure Quarterly20
For a thermal facility a license is re-
quired. To obtain the license the main re-
quirement is an approved environmental
impact study.
Once the facilities are ready to come
on stream, the operator will become an
agent in the electricity wholesale market.
Hidrotenencias has recently gone
through a corporate change of control,
what were the factors that made Hidro-
tenencias an attractive business oppor-
tunity for these new investors?
Hidrotenencias is well positioned to take
advantage of the attractive power market
in Panama, which has good fundamen-
tals given the constrained supply and the
continued demand growth, resulting from
significant economic growth and a large
portion of the population emerging from
poverty. The power generation market
in Panama has clear and market-driven
rules; generators can sell power through
PPA contracts that are put out for bid or
through the spot market at unregulated
prices. Finally, energy prices in Panama
are dollar denominated and the country
is investment grade, which facilitates the
financing of generation projects in favor-
able terms.
Who are the new shareholders?
The new shareholder is a group of in-
vestors led by ACON Investments
(“ACON”), an international private eq-
uity investment firm founded in 1996 that
has managed US$2.4 billion of capital
and invests throughout the United States
and Latin America. ACON is headquar-
tered in Washington, D.C. with Latin
American offices in Mexico City and São
Paulo. The investor group includes FMO,
the Dutch development bank, Proparco,
the French development bank and Aser-
gen, the largest developer and operator of
mini-hydro plants in Mexico, which has
developed approximately 134 MW of ca-
pacity.
What does each of the new sharehold-
ers bring to the table?
ACON has led the implementation and
improvement of governance, reporting
and monitoring systems, as well as the op-
Company Profiles

Latin Infrastructure Quarterly 21
M
r. Hanono is the
President and CEO
of Hidrotenencias
and Director of Em-
presas Vicsons, an investment
company run by the Hanono
family. He has been actively in-
volved with the plant design and
construction management of
Concepcion, LPN and LPS since
2005. Mr. Hanono has 17 years
of project management experi-
ence including real estate de-
velopment and construction. Mr.
Hanono graduated from the ex-
ecutive management program
at Harvard Business School. He
received his master’s degree in
Construction Management from
Massachusetts Institute of Tech-
nology and his Bachelor’s de-
gree in Civil Engineering and
Business Administration with an
emphasis in Finance from Tu-
lane University of Louisiana.
erations and maintenance program, which
are in line with industry best practices. In
addition, ACON together with Asergen
have closely supervised the construction
of the new plants, which are expected to
start operations in 2013. ACON has been
actively involved in determining PPA bid
prices under analysis prepared by man-
agement. In June 2012 each of the com-
pany’s three plants was awarded three
PPA agreements for the sale of power and
energy from July 2012 through December
2015. These PPAs significantly reduce
the exposure to spot price volatility and
guarantee a price during the contracted
period that is in excess of our original ex-
pectations. ACON has also leveraged its
regional network to source and analyze
expansion opportunities via acquisitions
and new project development. FMO and
Proparco, have provided Environmental
and Social guidance and helped imple-
menting a strict E&S Management Sys-
tem. Finally, principals of Asergen par-
ticipate in the Board and provide ongoing
strategic and technical support to refine
O&M plans, operational policies and re-
porting systems.
What is the current operating status
of the power plants under Hidrotenen-
cias’ control?
Hidrotenencias has been operating Con-
cepcion Hydroelectric Plant since 2008.
We are pleased because it has exceeded
all of our expectations. We are currently
commissioning Las Perlas Norte Hydro-
electric Plant, and we expect to commis-
sion Las Perlas Sur Hydroelectric Plant in
the next months. It is a very busy period
for us!
Hidrotenencias plans to expand its op-
erations regionally, what are the fac-
tors that make renewable energy op-
portunities in the region attractive?
Hidrotenencias, with the support of
ACON, has identified a strong pipe-
line of investments to multiply by up
to 10x its installed capacity. The plan
includes the acquisition or develop-
ment of projects in Panama, Costa Rica,
Guatemala, and Mexico among other
countries. Hidrotenencias seeks to man-
age more than 500 MW in renewable
energy assets across Latin America by
2017. Latin America is experiencing
fast growth in power demand (1.5x –
2.0x annual GDP growth vs. 1.0x in
developed world). Currently, there are
significant power constraints in the re-
gion, such as limited excess generation
capacity (demand – supply) and limited
Investors include ACON Investments,
FMO - The Dutch development bank,
Proparco - the French development
bank, and Asergen.
Once all the requirements are met a
concession is awarded usually for a 50
year period.
access to fossil fuels, and the size of the
economies limit the feasibility of large
projects. The World Bank estimates that
Latin America requires annual invest-
ment of US$15 billion in the electrical
sector in order to meet demand require-
ments.
Company Profiles

What is Astris Finance (“Astris”) and
what is your role?
Astris Finance is a US-based transac-
tion advisory firm specialized in infra-
structure and energy, with operations in
the Americas, Europe and Africa. The
firm has offices in Washington DC, Par-
is and Mexico. We specialize in advis-
Infrastructure
finance
advisory
inPanama
LIQ talks to Juan Toro,
Director at Astris Finance
ing sponsors and institutional investors
in structuring and financing infrastruc-
ture and energy projects in emerging
markets.
Astris has been very active throughout
the region recently, with which infra-
structure players do you most often
work with and why?
Historically, we have worked advising
sponsors in the process of crafting financ-
ing strategies in the context of a bid, or
assisting sponsors in the process of rais-
ing non-recourse debt at project level,
whether through a bank syndicate, A/B
loans structures, guaranteed debt pack-
ages, or capital markets. Lately, we have
also started working on the buy side rep-
resenting institutional investors and/or in-
frastructure funds acquiring assets in the
region or setting up investment vehicles
to go after greenfield projects.
How does Astris compete against the
project finance divisions of big project
sponsors?
We do not compete at all. They are our
clients and we are set to assist them in
reaching their goals: wining and financing
projects. We complement project finance
divisions and as such we have worked
successfully with the most sophisticated
sponsors in the world. We bring a fully
dedicated team of specialists with asset
and regional experience that allow us to
provide the best advice to our clients.
Can you please describe the services
you provide for companies looking to
bid for a project?
Astris Finance contributes to the review
of the bidding documents (early identi-
fication and mitigation of bankability is-
sues in draft contracts, Q&A sessions),
review of the adjudication criteria, and
sizing and optimization of sponsor bid us-
ing our state-of-the-art financial models.
Moving to Panama now, can you de-
scribe the Balboa Avenue project?
The Project involves the development of
a package of urban road works intended
to improve the connectivity of Panama
City’s western road network and alleviate
traffic congestion. Key Project compo-
nents include:
• Expansion works at Poets Avenue;
• Improvement works at Balboa Av-
enue;
• A new tourist breakwater in front of
the Fish Market; and
• An interconnection network between
Balboa Avenue and Poets Avenue,

which involves the construction of a
marine viaduct that will swing around
the Historic District.
The USD 782 million project is part
of the USD 1.5 billion Panama City
Road Network Improvement Program
and was awarded to Construtora Nor-
berto Odebrecht (“CNO”) pursuant to
an international public bidding contest
in March 2011. The financing takes
the form of a 4 year revolving receiv-
able purchase agreement to buy up to
USD 567 million of promissory notes
from the Republic of Panama known
as Cuentas de Pago Parcial (“CPPs”).
The CPP structure has been success-
fully used in the past in Panama for the
financing of several projects. CPPs rep-
resent an irrevocable and unconditional
payment obligation from the Republic
of Panama, and are progressively deliv-
ered by the Government as construction
milestones are achieved.
Who were the main players involved?
The main players involved were:
• Contractor: Odebrecht Panama
• MLAs: Bank of Tokyo-Mitsubishi
and Sumitomo Mitsui Banking Cor-
poration
• Arranging and Admin Agent: Bank of
Nova Scotia
What kind of services did Astris pro-
vide to its client?
Astris Finance acted as Financial Advisor
to CNO throughout the bidding, structuring,
placement, due diligence and closing of the
financing.Astris Finance also advised CNO
in the structuring of the interest rate hedg-
ing strategy, which consists of a string of
forward-starting USD zero coupon swaps.
What other sectors are you currently
looking at in Panama?
We are currently looking at projects in
the port and road sectors and also in the
energy sector both conventional and re-
newables.
What are some of the ways through
which the government of Panama is
encouraging foreign private sector
J
uan Francisco Toro has 15 years
of experience in investment
banking and infrastructure.
Over his professional career,
Mr. Toro has successfully raised
and arranged an aggregate in ex-
cess of USD 4 billion of long term
financing for infrastructure and
energy projects in Latin America,
Middle East and Africa. Mr. Toro
has worked with Astris Finance
since 2005 where he has han-
dled and led numerous projects
throughout Latin America repre-
senting over US$1.5 billion of in-
vestment in various infrastructure
sectors including transportation,
energy, and social infrastructure.
Mr. Toro created and led for three years the project finance practice
in Mexico for Dexia where his team participated in the financing and/
or structuring of more than 15 projects in infrastructure representing
over US$2 billion of investment. Prior to joining Astris, Mr. Toro served
at Taylor-DeJongh, a boutique infrastructure investment bank focused on
emerging markets,where he advised on power and energy projects scat-
tered throughout Asia, Africa, and the Americas, and at Lloyds TSB in Co-
lombia as a Senior Foreign Currency Trader in charge of managing the
foreign currency position of the bank.
Mr.Toro holds an MS with a concentration in international finance and
energy from the School of Foreign Service at Georgetown University
as well as a BA in economics and finance from Colombia’s Universidad
EAFIT.
parties to invest their resources in the
development and financing of the coun-
try’s infrastructure?
The Government of Panama keeps look-
ing for innovative payment mechanisms
to support the development of public-
private partnerships (PPPs). For in-
stance, structures such as the CPPs help
mitigate construction risk facilitating
private participation.
The Government of Panama keeps looking
for innovative payment mechanisms to
support the development of public-private
partnerships (PPPs). For instance, structures
such as the CPPs help mitigate construction
risk facilitating private participation.

Latin Infrastructure Quarterly24 Company Profile
What is your overall opinion on the
Panamanian institutional and regula-
tory framework towards ports?
The state of Panama has a very laissez-
faire approach regarding ports. The onus
for investment and risk is on the private
sector. It seems like the market has ac-
cepted the framework given that the over-
all container terminal throughput growing
at a compound annual rate of 19% since
1995.
Manzanilo
International
Terminal
tries, opening new markets and help-
ing the trade balance positively, while
importers can bring products cheaper
to end consumers; and
3. Options for users: while having a good
highway is always a benefit, having a
good highway and a good rail infra-
structure offers the users (shipping
lines/BCOs) different alternatives in
an ever more complex global supply
chain market.
17 ship-to-shore gantry cranes and top-
of-the-line cargo handling equipment,
MIT is one of the few terminals in the
area that can offer comprehensive cargo
handling solutions, including facilities to
move containers, roll-on/roll-off, project
and breakbulk cargo.
MIT has repeatedly won awards for its
efficiency, what are the key indicators
that make a port terminal efficient?
Manzanilo International Terminal
(“MIT”) is well connected through high-
ways to other cities in the region, what
would you say are the main reasons for
which a port terminal such as yours must
be adequately connected to transport in-
frastructure?
The main reasons are:
1. Port competitiveness: beneficial cargo
owners (“BCOs”) will look for the
most economical total transport solu-
tion and good connectivity to/from the
port helps drive down total transport
costs;
2. Country competitiveness: exporters
competing in a world-wide market
will be able to place their products at a
more competitive costs in other coun-
What are some of the main products
exported through MIT and what are
the main destinations?
Inbound cargo to MIT is well balanced
from Asia, Europe and the Americas. On
the other hand, 90% of the outbound car-
go has the Americas as destination, clear-
ly showing that MIT is the gateway to the
Americas for all types of commodities.
Please describe your facilities and
equipment. What services do you offer
to shipping lines?
MIT is strategically placed in the Atlan-
tic Coast of Panama, right adjacent to
the Panama Canal entrance. With a labor
force mainly from the province of Colon,
The main one is vessel productivity, that
is, how much time a vessel takes to clear
port, measured from the time the vessel ar-
rives at the port to the time it leaves the
port. This key performance indicator takes
into consideration aspects such as terminal
productivity, tug/pilot services and avail-
ability, authorities’ free pratique time and
cargo coordination between terminal, line
and BCOs. Other important key perfor-
mance indicators are cargo truck turn-time,
cargo damage occurrence, cargo data vis-
ibility rate through IT deployment.
Why is the logistics park important to
your clients?
Now that MIT has helped establish Pana-
ma as a cargo hub for the area, it is impor-
LIQ talks to Juan Carlos Croston, Vice-President
Marketing

Inbound cargo to MIT is well
balanced from Asia, Europe
and the Americas. On the other
hand, 90% of the outbound
cargo has the Americas as
destination, clearly showing
that MIT is the gateway to
the Americas for all types of
commodities.

tant for shipping lines using Panama as a
cargo distribution center to offer their end
customers more integrated services. Hav-
ing the best connectivity in the continent,
world-class third party logistics and great
transport infrastructure, it is only natural
to go after the so-called “last-mile logis-
tics” services.
MIT is an active member or part of the
following international codes and or-
ganizations: Customs-Trade Protection
Against Terrorism, Business Alliance for
a Secure Commerce, International Ship
and Port Security Code, and is one of five
pilot members of the Panama Customs-
led new Authorized Economic Operator.
MIT has focused on sustainable growth,
with six particular areas of interest:
1. Employees: 90% of our people comes
from Colon, close to 200 of our people
have been working with MIT since its
beginnings in 1995 and some of them
now help our parent company Carrix
In a recent LIQ article we covered the
importance of security providers to in-
frastructure asset operators, what are
the most important security threats to
MIT and how do you deal with them?
How do MIT’s activities affect the city
of Colon and what are some of the ac-
tions derived from MIT’s corporate so-
cial responsibility policies?
train new international employees at
our training center in Colon or as ex-
pats in overseas operations;
2. Environment: MIT is at the fore-front
of environmental-friendly cargo han-
With a labor force mainly from the province of Colon, 17 ship-to-shore
gantry cranes and top-of-the-line cargo handling equipment, MIT is
one of the few terminals in the area that can offer comprehensive cargo
handling solutions, including facilities to move containers, roll-on/roll-
off, project and breakbulk cargo.

Latin Infrastructure Quarterly 27Company Profile
J
uan Carlos Croston isVice President Marketing with Manzanillo International Terminal – Panama (MIT-Pana-
ma).In this role,Mr.Croston manages all commercial aspects of the terminal.He joined MIT-Panama as a Ter-
minal Planner in 2004 and was promoted to the position of Customer Service Manager in 2005. Mr. Croston
serves asVP Marketing since January 2008.He’s also an active member of the Maritime Chamber of Panama
(currently,board of directors’second vice president for the period 2012-2013),member of the Caribbean Ship-
ping Association’s General Council and several other local and international organizations.
Before joining MIT-Panama, Mr. Croston worked for 4 years in the supply chain business, including turns as
officer onboard container vessels and as distribution manager for an import/export company in Panama.
Mr. Croston holds a B.S. degree in Nautical Engineering from the former Nautical School of Panama and a
M.Sc. degree in Maritime Affairs from the World Maritime University, Malmo, Sweden. He is married and has 3
children.
90% of our people comes from Colon, close
to 200 of our people have been working
with MIT since its beginnings in 1995 and
some of them now help our parent company
Carrix train new international employees
at our training center in Colon or as ex-
pats in overseas operations.
dling equipment initiatives that help
mitigate impact to nature while also
supporting external environmental
projects and organizations such as the
STRI in Isla Galeta;
3. Vendors: encouraging and supporting
micro and small businesses in Colon,
while maintaining and developing a
strong relationship with all product
and service suppliers, has been one of
MIT’s key objective since its begin-
nings, nurturing best practices along
the way;
4. Commercial drive: MIT has retained,
in a very competitive environment,
more than 95% of its customer base
since 1995, maintaining and develop-
ing a strong relationship with its cus-
tomers;
5. Community outreach: total invest-
ment in Colon is now US$ 6 million
and includes development of hospi-
tals, schools, support of sport pro-
grams and maintenance of key land-
mark places in Colon. These projects
are developed following international
guidelines to ensure community in-
volvement and sustainable projects;
6. Public advocacy: MIT is an active
member of various local and inter-
national organizations, and a case-
study of successful public-private
partnership in Panama. As the lead-
ing cargo terminal in Panama, MIT
continues to spearhead the develop-
ment of an up-and-coming logistics
industry that currently accounts for
over 20% of Panama’s GDP.

Latin Infrastructure Quarterly28 Projects
What is the UEP and what is UEP’s relationship with Union
Eólica Española (Spanish Eolic Union - UEE)?
UEP is a subsidiary of Unión Eólica Española, a Spanish com-
pany with solid and proven experience in the renewable energy
sector, with more than 300 MW installed worldwide in wind
farms, cogeneration projects, biomass and waste management
projects.
With our team in Panama, UEE intends to transfer its suc-
cessful business model to Panama, installing innovating infra-
structures with proven technology worldwide, which favors the
introduction of clean energy.
What other infrastructure-related Spanish companies are
presently doing business in Panama?
I do not think any other Spanish companies are constructing
wind farms in Panama. However, there are several companies
involved in hydro plants and energy distribution, as Gas Natural.
Furthermore, the companies that had been contracted for the bal-
ance of plant of UEP´s wind plants are Spanish, because one of
the requirements in the ETESA [Panama’s state-owned electrical
WindPowerinPanama
The
Penonomé
Wind
Farm
LIQ talks to Rafael
Perez Pire, Executive
Director of the Unión
Eólica Panameña
(Panamenian Eolic
Union - UEP)
transmission company] tender was expertize for more than 10
years in the construction of wind facilities.
The homepage of UEP’s website gives an excellent concise
explanation on why you chose Panama to develop projects; can
you comment on Panama’s politic and economic stability and its
state policy towards foreign direct investment?
For us, as for other investors, it’s important to maintain clear
rules in order to ensure the success of the Project.
UEP chooses Panama for being a country with contrasted
political, legal and economic stability, and with infrastructure
and legislative systems that favor the establishment of clean en-
ergy. We believe that this political, legal and economic stability
is what makes Panama an ideal country for capital inflows and
foreign direct investment.
What are the sources of financing for your projects available
in Panama?
Financing is coming from local and international banks,
leaded by BICSA [Banco Internacional de Costa Rica S.A.]
There are some multilateral banks also involved in project
financing.

Latin Infrastructure Quarterly 29Projects
Please describe the main characteristics and status of the
Penonomé Wind Farm project and the economic benefits envi-
sioned for end users.
The Penonomé Wind Farm, located in the city of Penonomé,
province of Cocle, will be the first wind farm in Panamá and the
biggest in Central America. With an investment of more than
440 million dollars, the Penonomé Wind Farm will strengthen
the national energy matrix, complementing the existing tech-
nologies and creating more balance and security to the national
electric system.
All the necessary topography and geotechnical studies are
completed, as well as the implantation phase of the concrete
plant and the quarry. The civil works for the Substation El Coco
are in process, as well as the purchase of the wind turbines and
the main equipment for the Substation El Coco. We estimate that
the wind farm will begin its operation between December, 2013
and January, 2014.
Among its benefits we can list:
• The Penonomé Wind Farm will have a total installed power
of 220 megawatts that will cover between 6 and 7% of the
total energy consumption in Panama. With this power, it will
be able to supply 100,000 Panamanian families, that’s equiv-
alent to more than half a million citizens.
• 75% of the energy will be produced during the summer when
it’s windier, allowing water savings during the dry season
and reducing dependency on fossil fuels.
• The production of the Penonomé Wind Farm will reduce the
consumption of approximately 145 thousand tons of petro-
leum a year, will avoid the emission of 450 thousand tons
of CO2 to the environment, the emission of 1,000 tons of
nitrous oxides (NOx) a year and, 500 tons of SO2 a year, that
produces acid rain.
• The entry of wind energy will strengthen Panama’s energy
UEP chooses Panama
for being a country with
contrasted political, legal
and economic stability,
and with infrastructure
and legislative systems that
favor the establishment of
clean energy.

matrix and will increase the security of the electric system of
the country, significantly reducing fluctuations in the service.
• The project is going to generate jobs especially for the Cocle
community construction phase as well as its operation phase.
• UEP will develop important social projects in benefit of the
Penonomé community and neighboring areas.
It’s important to highlight that the wind turbines of the Penono-
mé Wind Farm are compatible with the current use of the land,
which means that they will not affect the regular activity carried
out there. Besides, these lands are generally used for cattle farm-
ing and planting of rice, meaning that the Penonomé Wind Farm
does not require the movement of the proprietors and does not
cause deforestation or degradation of the environment.
Furthermore, the wind turbines will be located at least 500 me-
ters away from the houses and their towers are 95 meters high, so
the machinery won’t affect the neighboring communities.
Who are some of your suppliers for this Project?
UEP recently formalized an agreement with Grupo Cobra for
the execution of the civil and electric works of this project. It’s a
turnkey contract that includes the construction of internal roads,
roads, trench, foundations and other civil works in the project.
Cobra Group will also be in charge of building El Coco’s
substation and all electric works for the connection of the wind
farm to the National Interconnection System.
Lastly, the contracted works include the development of the
optic fiber communications network between the wind turbines
and the substation, as well as the one between the substation and
the National Dispatch Center.
The company also finalized its agreement with Goldwind USA
Inc. for the supply of the wind turbines. Goldwind is the largest
manufacturer of wind turbines in China and the second largest glob-
ally.The Penonomé wind farm will feature Goldwind’s GW2.5MW
Permanent Magnet Direct Drive (PMDD) wind turbines.
Goldwind will be supplying, erecting and commissioning
the wind turbines and power plant, including the supervision
of work performed by the balance of plant contractor on civil
works construction, electrical and transmission interconnection.
Can you describe the waste management project you are
currently working on?
We are planning to use urban solid waste to produce energy us-
ing a gasification process to produce synthesis gas to be used
in conventional gas motors. The gasification process will use a
gasification device developed jointly by two companies in Spain
and the Polytechnical University of Madrid for biomass. Before
gasification we will homogenize the wastes and separate all the
inorganic fractions, to be recycled, and use only the organic
fraction of the urban solid wastes.
R
afael Pérez
Pire is an
industrial
e n g i n e e r
from the Polythec-
nical University of
Madrid. With 20
years of experience
in renewable ener-
gies, Rafael is the
Executive Director
of Unión Eólica Pa-
nameña, company
that is building the
Wind Farm Penon-
omé, the first Eolic
Project in Panama.
Rafael began his
career working as an engineer in groundbreaking
Eolic projects in Tarifa, south of Spain. He is Co-
Founder of EnergyTec, S.L., a co-generation Engi-
neering and Development Company and, Windset,
S.L., a Wind Energy Development Company.
In 1997 he founded Viento y Energía, an Engi-
neering company specialized in renewables energy
projects. In the year 2002, he started the construc-
tion of the first wind farm in Spain, with 1.5 MW
turbines. Since then, he has developed more than
1,300MW in renewable energy projects mainly wind
farms,but including 12MW in solar PV plants,10MW
in Biogas plants, 8MW in Biomass plants and 60MW
in Co-generation plants.
In 2008, Rafael moved to Panama as part of the
company Unión Eólica Panameña (subsidiary of
Unión Eólica Española) to do feasibility studies and
consultancies for a project that is now a reality: the
Penonomé wind farm.
The Penonomé Wind
Farm will have a total
installed power of 220
megawatts that will
cover between 6 and
7% of the total energy
consumption in Panama.

The Metro de Panamá project is an appropriate reflection
of the growth of Panama, what can you tell us about the
economy and the main engines of growth?
Panama has shown the highest GDP growth in Latin America over
the last years and has the largest GDPper capita in CentralAmerica.
This significant growth can be attributed to the dynamics of
the following sectors: construction, mining, transportation, stor-
age and communications, hotels and restaurants, water and elec-
tricity, commerce, private health, and financial services.
The public sector cannot be left aside this listing given that
it plans to invest US$ 13.6 billion between 2010 and 2014. This
number does not include the US$ 5,250 million for the expan-
sion of the Panama Canal.
What is the status of public transportation in Panama City
and how will the Metro improve it?
The problems with transport in Panama City are of a great mag-
nitude and considerably affect the quality of life of the popu-
lation. The majority of the city’s inhabitants depend on public
The “Metro
de Panamá”LIQ talks to Roberto Roy, Executive Secretary
transportation to move around the city. Public transportation is
currently slow, poorly organized and of low quality and the seg-
ment of the population that uses the car to move around experi-
ences high congestion levels.
The Línea 1 of the Metro de Panamá is a project that mate-
rializes the transportation and urban planning efforts that have
been carried out since the 90’s by several administrations. While
these efforts have not been linked, they have had the virtue of
generating knowledge about urban and transportation problems.
As the majority of Latin American cities, the Metropolitan
Area of Panama City has shown an uninterrupted increase in
its motorization rate, which is associated with economic growth
and the low quality of public transportation services.
The average length of commuting to work is of 70 minutes
which is a relatively long time considering the size and popula-
tion of Panama City. It is important to note as well that more
than 50% of trips using public transportation involve one or
more transfers.
The economy of the sectors with the lowest income is the one
most severely affected. Their transportation-related expenses
with respect to their income are three times higher than the av-
erage (16% against 4.6%). The overall perception of the service
provided by public transportation is that it is getting worse with
time. This perception is aggravated with the increasingly fre-
quent tragic accidents.
The studies performed set forth the necessity to approach the
urban mobility problem of Panama City through the develop-
ment of an integrated transportation system, restructuring the
bus service and adding mass transportation systems along the
main city’s corridors. Among the different technological alter-
natives that were analyzed for mass transportation systems were
the light rail, buses for exclusive lanes and the monorail.
Accordingly, in 2009 the Secretariat for the Metro de Pan-
amá, based on a preliminary demand study that confirmed that
the axis San Isidro – Albrook should be the one to focus on,
began the project that has materialized with the construction of
the first line of the Metro.
The objective is the implementation of a Metro type high ca-
pacity component that is integrated physically and tariff-wise
with the rest of the city’s public transportation system and that
improves the current urban mobility conditions affecting the
Metropolitan Area of Panama City. The users and the overall
population will be benefited through savings in the cost and time

of each trip, an enhanced traffic-related safety and an improve-
ment in environmental conditions.
The Línea 1 is the first stage of the Master Network of Mass
Transport (Red Maestra de Transporte Masivo) which will be
made of 4 Metro lines and a tram linking Paitilla with Casco An-
tiguo. This system will have to be comprehensively integrated
with the city’s bus system which will create more efficient trans-
portation routes and will decrease the length of trips.
Can you provide us with a brief description of the project
for the Línea 1?
The Línea 1 will have the capacity to carry more than 15,000
people per hour per direction at first and will grow to 40,000
people per hour per direction by 2035.
The line will be 14km long and will have 13 stations: 5
above-street level (Los Andes, Pan de Azúcar, San Miguelito,
Pueblo Nuevo y 12 de Octubre), 7 below-street level (Fernández
de Córdoba, Vía Argentina, Iglesia del Carmen, Santo Tomás,
Lotería, 5 de Mayo, Curundú) and one half-buried terminal (Al-
brook). The construction of Curundú station has begun and will
be completed in the future. In the same way, the foundations
were left ready for the future construction of the fourteenth sta-
tion, El Ingenio. Each of the stations will have elevators and
escalators to facilitate the access of all the users, included those
physically handicapped.
The above-street level stations will have an average length
of 100 meters and the below-street level stations will have an
average length of 115 meters. Both types of stations will have a
width of 20 meters.
Initially the line will have 19 trains each of which will have 3
coaches and will be able to safely and reliably transport 600 pas-
sengers. Each train will be able to have a maximum of 5 coaches
(1000 passengers).
The Metro de Panamá will have a high-technology automatic
driving system to control the train›s operations and a 1,500 volts
rigid overhead electrification system that will guarantee a trans-
port system free of polluting gases. Further, a yard and work-
shop facility will be set up at the end of the line, covering an area
of approximately 10 hectares.
The most important aspect of this project are the social and
economic benefits that it will bring. An update to the demand
study performed in September, 2012, identified the following
benefits that the project will bring between the years 2014 and
2035:
• A satisfied demand of 41,7 million passengers as of 2014.
• An annual demand of 77,9 million passengers by 2035.
• Accumulated savings in transportation operating costs of
US$ 1,020 million.
• Accumulated savings from a lower number of accidents of
US$ 176.2 million.
• Accumulated savings from a reduction in polluting gases of
US$ 49.7 million.
But there are also non-quantifiable benefits that this project will
bring:

• Family time.
• Increase in competitiveness.
• Increase in productivity.
• Tourism.
• Culture.
• Health.
• Rest.
• Punctuality.
As of December, 2012, the overall accumulated progress of the
project is of 70.5%.
Please describe the tender process for the Línea 1.
The tender process for the awarding of the Línea 1 contract be-
gan with a pre-qualification process that lasted three months and
ran along smoothly. We had seven offerors and three of them
qualified for the final round. The idea behind the pre-qualifica-
tion was to make sure we would then analyze the proposals of
companies with proven experience and technical, administrative
and financial capacity to carry out a project of this magnitude.
The three offerors that qualified for the final round were:
• CONSORCIO CIMA, made up by: Acciona Infraestructu-
ras, S.A. (52%), Mitsubishi Corporation (12%), Mitsubishi
Heavy Industries, LTD. (12%), Constructoras ICA, S.A. de
C.V. (12%) and Construcciones y Auxiliar de Ferrocarriles,
S.A. (12%) with CAF trains;
• CONSORCIO LINEA UNO, made up by: Construtora Nor-
berto Odebrecht, S.A. (55%) and Fomento de Construccio-
nes y Contratas, S.A. (45%) with Alstom trains; and
• CONSORCIO GRUPO ITALIANO METRO PANAMA,
made up by: Impregilo SPA (50%) and Astaldi and Ghella
(50%), with Ansaldo-Brea trains.
We then began the analysis of the proposals following the provi-
sions of the federal law of government contracts (Ley de Contrata-
ciones Públicas) which meant that the price was delivered previ-
ously and was known only after the technical evaluation was over.
The contract was awarded to CONSORCIO LINEA UNO
that, besides the companies mentioned above, had Sener Ingeni-
ería y Sistemas, S.A. (Spain) and T.Y. Lin International (U.S.A.)
as project designers.
The tender process was designed and administered in a trans-
parent and impartial manner, complying with all the require-
ments imposed by the relevant laws and selection criteria set
forth in the specifications for pre-qualification and the statement
of objections.
What is the cost of the Línea 1 project?
The costs have been divided into the following three compo-
nents:
Main contract (units in US$ million):
• Civil works and electromechanic systems engineering: 54.9
• Civil works for tunneling (8km), stations, viaducts (6km),
works in the city, canals: 966.2
• Design, supply and installation of electromechanic systems:
65.7
• Design, supply and installation of an integrated railway sys-
tem and rolling stock: 427.6
• Other (Quality inspections, price variation for indexed mate-
rials, reallocation of public services): 65.7
• Additional civil works: 91.0
• TOTAL: US$ 1,671.2 million
Related costs (units in US$ million):
• Escalators and elevators: 23.1
• Yard and workshop facility – civil works related to buildings
and paving: 30.0
• Fare charging system: 8.0
• TOTAL: US$ 61.1 million
Expenses and transitional investments by the Metro de Panamá
Secretariat (units in US$ million):
• Project management: 29.3
• State’s Insurance Policies: 15.3
• Indemnities and compensations. Social Assistance Program,
rent and land acquisition. Assistance to businesses: 22.4
• Administrative and transitional expenses by the Secretariat
from 2010 through 2014: 20.1
• Contingencies: 60.7
• TOTAL: US$ 147.8 million
It is important to point out that the entire work is intended to be
executed in just 38 months including engineering design and the
final commissioning tests. Two new Herrenknecht tunnel boring
machines with an external diameter of 9.77 meters were used in
the project.
How was this project financed?
The construction of the Línea 1 of the Metro de Panamá is a
project that represents a great opportunity for the country’s de-
velopment and promotes foreign investment and the support of
international financing institutions.
Among the main international financing institutions that have
invested in this project we find:
• Confederación Andina de Fomento – Latin American devel-
opment bank: initially invested US$ 400 million. Recently
approved a second financing for US$ 100 million.
• Citibank / World Bank (MIGA): Citibank (structuring agent)
and MIGA issued on June 30, 2012, a guarantee for up to
US$ 250 million.
• Compañía Española de Seguros de Crédito a la Exportación
(CESCE): US$ 61 million.
• Compagnie Française d’Assurance pour le Commerce Exté-
rieur (COFACE): US$ 284 million.
• Government: for current or transitional expenses such as
compensations, acquisitions, rent, project manager, partial
financing of works and equipment such as elevators and es-
calators or the down payment to the EPC contractor.

What can you tell us about some of the main contracts af-
fecting the project such as the EPC, insurance and the con-
tracting of the Project Manager?
Under the EPC contract, the contractor is responsible for the
design, detail engineering, the supply of the trains, the con-
struction and commissioning of the system. This contract was
tailor-made for this project and the Secretariat was advised by
an international law firm with experience in Metro projects. The
contract also includes the reallocation of public services and
the implementation of an environmental plan. Furthermore, the
O
n August 20, 2012, Ricardo Martinelli, President of Panama, ap-
pointed Engineer Roberto Roy as Minister of Panama Canal Af-
fairs. Mr. Roy will act as president of the Board of Directors of
the Panama Canal Authority. Since July, 2009, Mr. Roy has been
in charge of one of the National Government’s mega projects: the Metro de
Panamá. His role is to plan and coordinate the process of design, construc-
tion, operation and maintenance of the Línea 1.
Graduated with three degrees from Georgia Tech (United States),Mr.Roy
has more than 30 years of experience in the construction industry as Presi-
dent and Founding Partner of Ingeniería RM, one of the most well-known
companies in the field.
He has been a member of important Boards of Directors. For 9 years
he was a part of the wholly Panamanian Board of Directors of the Panama
Canal Authority, which took over management of the canal after Panama
regained control of it. He was also Director of La Prensa newspaper and
Caja de Ahorros. He is a former-President of the Panamanian Construction
Chamber, from where he was a sponsor of the Law of Preferential Interests
(Ley de Intereses Preferenciales), which has given innumerable benefits to
thousands of Panamanians.
ment, as owner of the work, is directly involved and participates
in the processes of risk and claim management.
The Project Manager and Technical Advisor (consortium
made up by Metro de Barcelona, AYESA and Inelectra) is the
party responsible for monitoring the contractor and is the repre-
sentative of the State before the contractor for technical matters.
Metro Bus is intended to complement the Metro de Panamá,
can you tell us about this project?
The Metro Bus is the system that began the transformation of
the Transportation System in Panama. It comprises a brand new
fleet of 1,200 buses that replace the old “Diablos Rojos” (Red
Devils) that caused so many problems and tragedies. The system
was tendered so that it is administered by only one operator.
Metro Bus’ rates will be harmonized with those of the Metro de
Panamá.
contract has a provision to adjust for changes in the prices of
materials, inputs and workforce and sets forth the procedure to
calculate the adjustment and a quarterly calculation. As a result
of this provision, previously agreed on prices can be increased
or reduced.
We decided to move forward with the project using a OCIP
insurance (Owner-Controlled Insurance Program), which saves
costs and improves the risk and claim management. The govern-
The Línea 1 of the Metro
de Panamá is a project that
materializes the transportation
and urban planning efforts that
have been carried out since the
90’s by several administrations.

Latin Infrastructure Quarterly36 Deals
What is the infrastructure-related
portfolio of the Inter-American Devel-
opment Bank (IADB) in Costa Rica?
The IDB plays a critical role in support-
ing the country in developing its infra-
structure. We are very active in the sector,
providing sovereign guaranteed loans to
the Government of Costa Rica and at the
same time supporting private and state-
owned companies with non-sovereign
guaranteed financing. In the last few years
we have approved loans for the Juan San-
tamaria International Airport (US$ 45
million), water and sanitation investments
(US$73 million), education infrastructure
(US$167 million) and during this year the
second phase of the power sector invest-
ment program for US$250 million plus
the financing for US$200 million for the
Reventazón Hydropower Project and we
continue to look to projects in the trans-
port sector.
Whatistheenergymatrixofthiscountry?
Costa Rica has a very clean energy ma-
trix. Hydro represents 72% of total in-
stalled capacity, geothermal 14% and
wind 4%. The remaining 10% is thermo.
The country has the ambitious goal of be-
coming carbon neutral by 2021, thus they
work towards maintaining an energy ma-
TheIADBand
theReventazón
HydropowerPlant
LIQ talks to
Gian Franco
Carassale,
Project Team
Leader in the
Infrastructure
Division of
the Structured
and Corporate
Finance
Department
of the Inter-
American
Development
Bank
The Reventazón Project includes the construction
of a 130 meter high dam, flooding of a 6.9 km2
reservoir and a 4.2 km river diversion between the
dam and powerhouse.

Latin Infrastructure Quarterly 37Deals
trix heavily based on renewables. Reven-
tazón is a key part of that goal.
Please describe the main characteris-
tics of the 305.5MW Reventazón hy-
droelectric project?
The Reventazón project consists of the
design, construction, operation and main-
tenance of a 305.5 MW hydroelectric
plant and its associated facilities includ-
ing transmission lines, substations and
access roads. The Project is located in
the Province of Limon, located eight ki-
lometers southeast of the city of Siquirres
in Costa Rica. The Reventazón Project
includes the construction of a 130 meter
high dam, flooding of a 6.9 km2 reservoir
and a 4.2 km river diversion between the
dam and powerhouse and will use the
waters of the Reventazón River to gener-
ate an average of 1,407 gigawatt-hours
(GWh) of electricity per year.
Why is it so important for this country?
Costa Rica’s economy has grown steadily
over the last few decades, and this has
driven an increase in electricity demand.
The economy is estimated to continue its
sustained growth from 2012 onwards,
producing rapid growth in energy de-
mand. The Electricity Generation Expan-
sion Plan 2012-2024 proposes the addi-
tion of net electricity generating capacity
of 1,714 MW between 2012 and 2024,
98% from renewable sources.
Rica, generate an average of 1,407 giga-
watt-hour (GWh) of electricity per year
and become the largest renewable energy
project in Central America.
ICE started construction of the Project
in September 2009 and, as of December
2012, it is approximately 41% complete.
The Project is expected to finalize con-
struction and start operations in August
2016.
Who is the sponsor of this project and
what is its track record?
The Project will be developed through
a special purpose trust established by
the Instituto Costarricense de Electric-
idad (ICE). ICE is a vertically integrated
state-owned company vested with the
responsibility to provide electricity ser-
vices including generation, transmission
and distribution of electricity throughout
Costa Rica.
Together with its subsidiaries, it is
one of the largest corporations in Central
America with US$9.9 billion in assets,
equity of US$5.9 billion, sales of US$2.3
billion and an EBITDA of US$0.6 billion
in 2011. ICE is rated BB+ by Fitch and
Baa3 by Moody’s.
ICE’s electricity generation assets rep-
resent 77% of the total national installed
capacity; it owns 100% of the transmis-
The Reventazón Project is a key com-
ponent of the expansion plan and once
completed it will represent approximately
10% of total installed capacity of Costa
We are very active
in the sector,
providing sovereign
guaranteed loans to
the Government of
Costa Rica and at the
same time supporting
private and state-
owned companies
with non-sovereign
guaranteed financing.

Latin Infrastructure Quarterly38 Deals
sion system and together with its subsid-
iary CNFL, it distributes energy to 78%
of the population.
ICE has designed, built and currently
operates almost all hydropower facilities
in Costa Rica. It will act as an EPC Con-
tractor for the special purpose trust and
later the operator of the plant.
G
ian Franco Carassale is a Senior Investment Officer in the Structured and Corporate Finance De-
partment of the Inter-American Development Bank. In his role, he leads the appraisal and financing
of sustainable transport and renewable energy projects. Gian Franco holds a Bachelor’s degree in
economics at University of Buenos Aires, Argentina and Master’s degree in finance at Di Tella Uni-
versity, Argentina. Prior to joining the IDB in 2003 he worked in finance-related positions for a number of small
companies in Argentina.
million will come from the IDB´s own re-
sources and the B-Loan is expected to be
funded through a private placement (Reg
D format) in the US market. It will be the
first time that an MDB has attempted this
innovative structure, opening the door for
potential replication and bringing the ben-
efit of institutional investors attracted by
long tenors to address infrastructure needs
in Latin America and the Caribbean.
In addition to the US$900 million fa-
cility to the trust, ICE is expected to mo-
bilize financing to fund their equity con-
tribution into the trust for up to US$300
million including a US$200 million CA-
BEI/EIB facility with a tenor of 20 years
and a US$100 million loan from the IDB
sovereign guaranteed window.
Please describe the financing package
for this project? Who are the other
players participating?
The trust is expected to receive loans to-
taling up to US$900 million. The facil-
ity will have a maturity of 20 years with
4 years of grace. The IFC will prove a
US$100 million loan, a consortium of lo-
cal banks will provide US$200 million in
colones-denominated financing, while the
rest will be lent by an IBD A/B Loan of
up to US$600 million, of which US$200
The Reventazón project
consists of the design,
construction, operation and
maintenance of a 305.5
MW hydroelectric plant
and its associated facilities
including transmission
lines, substations and
access roads.

O
SX is managing a broad and
diversified order book of FP-
SOs, fixed platforms, supply
vessel´s and medium-range
tankers. The Açu Shipbuilding Complex
(UCN Açu), which will be the largest
Shipbuilding Unit in the Americas, is un-
der construction since July 2011 at theAçu
Superport Industrial Complex, located in
the São João da Barra Industrial District,
with technology from its partner Hyundai
OSX is an EBX Group company which provides solutions for
the offshore oil industry by means of integrated operations
in shipbuilding, leasing of exploration and production (E&P)
units, and operation and maintenance (O&M) services.
more than US$ 4.5 billion in funding from
the financial and capital markets via its
IPO, financing and senior secured bonds in
the international markets.
Currently OSX is managing an order
book of 23 units destined for the produc-
tion of oil and gas in Brazil which are:
5 FPSOs and 4WHPs for client OGX,
OSX provides solutions
for the offshore oil
industry by means of
integrated operations
in shipbuilding, leasing
of exploration and
production (E&P) units,
and operation and
maintenance (O&M)
services.
Heavy Industries, the global leader in na-
val construction. For the implementation
of its projects, OSX has already obtained

1 PLSV for client Sapura, 11 medium-
range tankers for client Kingfish and 2
FPSOs for client Petrobras.
The construction of the Açu Shipbuild-
ing Unit in the Açu Superport Industrial
Complex in São João da Barra, located in
northern Rio de Janeiro State, has been
progressing according to schedule since
construction began in July of 2011, with
partial operation beginning in the first
quarter of 2013 and completion estimated
for the second quarter of 2014.
Main achievements in the construc-
tion of UCN Açu are the conclusion
of earthworks; equipment and systems
contracted: steel plate cutting machines,
pipe cutting machines, steel plate pre-
treatment system, gantry cranes and over-
head cranes, panel lines, shot blasting
machines and press and benders; contract
for supply and maintenance of the 345kV
substation and connection with the trans-
mission line; contract of the Almagesto
system, the focus of which is the instru-
mentalization of the key shipbuilding
processes and systems.
Technological Partnership with
Hyundai
UCN Açu is a 5th generation shipyard,
built and to be operated with technology
from our Korean partner Hyundai Heavy
Industries (“HHI”), the world leader in
naval construction.
For the past almost three years of
strategic partnership between OSX and
Hyundai, HHI has contributed with its 40
years of experience in naval construction,
aiming to provide OSX with Asian levels
of productivity, with the implementation
of efficient processes in the construction
and operation of UCN Açu.
In that sense, the company currently
counts on eight Hyundai employees in
Rio de Janeiro, assisting on technical
inquiries regarding construction design
of UCN Açu, as well as in the interface
with the HHI team in Korea, which is
dedicated to the conclusion of operating
manuals and the preparation for the UCN
Açu’s team training in the HHI’s Korean
shipyard.
OSX’s partnership with HHI also in-
cludes adopting engineering projects for
maritime units already built by Hyundai
in its Korean facilities (as-built design)
and the technical assistance from Hyun-
dai during construction of these units.
OSX has contracted additional equip-
The Açu
Shipbuilding
Complex (UCN
Açu), which will
be the largest
Shipbuilding Unit
in the Americas, is
under construction
since July 2011 at
the Açu Superport
Industrial Complex.
ment for UCN Açu with Hyundai, such
as the Steel Plate Pretreatment System to
protect metal surfaces during manufac-
turing; press & benders to manufacture
pipes and curved surfaces; and the Panel
Line to manufacture components (pan-
els) that will form the blocks for vessel
hulls.
ITN – Institute of Naval Technol-
ogy (Instituto Tecnológico Naval)
OSX has started the first classes of the
Professional Training Program in Ship-
building that ITN – Institute of Naval
Technology (Instituto Tecnológico Na-
val) is conducting in partnership with
SENAI/FIRJAN, the most important en-
tity for industrial professional training in
Latin America.
Of the 3,100 professionals selected
for training until 2013, 880 students
have begun the 23 free courses offered
in Metal-Mechanics, Electricity, Met-
allurgy, Automation/Instrumentation,
Oil, Automotive Operation, Construc-
tion and Management in São João da
Barra and Campos de Goytacazes. The
courses are free and selected candidates
receive a scholarship.
For this Training Program, approxi-
mately 20,000 applications were received
and approximately 15,000 candidates per-
formed selection tests and approximately
3,100 candidates were selected for the
first phase of the Program.
In addition to these training initiatives,
the ITN plans to act in partnership with
research institutions in the technological
development of the shipbuilding and off-
shore operation sectors in Brazil.

T
he quality of a country’s infra-
structure plays a key role in de-
termining its productivity and
competitiveness, thus helping
reduce the volatility of its growth cycle
and the capital flows to which underde-
veloped economies in terms of infrastruc-
ture are exposed.
A wide and efficient infrastructure es-
sentially binds production and consump-
OverviewandChallenges
for the
Mining
Sector in
Argentina
Andrés Pezzutti
Infrastructure includes the physical and social capital that
a country or community needs for its economic system to
work properly in the provision of goods and services. The
social infrastructure refers to assets such as Educational,
Health, Security and Recreational facilities, as well as Pub-
lic Housing. Whereas, the economic infrastructure refers
to Transport (e.g. airports, roads, ports), Communications
(e.g. transmission, satellites, cable networks), Utilities (e.g.
energy distribution networks, storage, power generation,
water, sewage), and Renewable energy.
tion markets at a lower cost, both between
regions from the same nation and with the
rest of the world. In the absence of it, the
contribution to determine the competi-
tiveness of a country is often replaced by
governments with the management of ex-
change rates in order to reduce the costs
of internal logistics. But, given that they
are highly dependent on the international
context and the economic cycle, it re-
stricts the sustainable development of the
productive matrix onto other industries
which soon find the size and efficiency of
the infrastructure diminished. Direct for-
eign investment is essential for the local
development of the mining sector, and in-
frastructure coupled with political institu-
tions is one of the main factors for the de-
velopment of the sector in the long term.
Mining in Argentina has grown expo-
nentially during the last 10 years, hand in
hand with the global growth of the indus-
try. However, in order to strengthen this
growth in the long term the challenges
ahead are manifold.
Regional Overview
Precious metals’ prices are driven by
many factors including money supply,
sovereign debt levels, exchange rates,
CDS spreads –default protection costs-,
interest rates, inflation and production
demand from other sectors such as jew-
elry and electronics. However, the global
economic downturn and a renewed ex-

Latin Infrastructure Quarterly - Issue 6

Latin Infrastructure Quarterly - Issue 6

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Latin Infrastructure Quarterly - Issue 6