WASHINGTON, D.C. — CG/LA Infrastructure LLC has announced the release of its Latin American Infrastructure 2015 Report, the firm’s annual five year projections of the Latin American infrastructure market. The region is projected to invest just over $450 billion in the five-year period 2011 to 2015. Additional results will be released during the 8th Annual Latin American Leadership Forum (LALF8), which will take place in Bogotá, Colombia, April 21 to 23.
“These numbers represent an average investment of just over 2 percent of GDP region-wide,” said Norman F. Anderson, president and CEO of CG/LA. “These figures should be seen as a call to arms, when competitors around the globe are investing between 6 percent (India) and 10 percent (China) of their GDP annually in infrastructure.”
According to Anderson, there are a number of positive signs on the horizon, but nothing to suggest that the region will dramatically increase investment as a percentage of GDP. “The real figure should be over 4 percent of GDP, yielding an infrastructure market greater than $1 trillion,” he said.
Countries with the strongest prospects, in terms of growth in infrastructure investment, are those with the strongest sense of infrastructure as critical to competitiveness. Brazil, with World Cup and Olympics projects, is projected to show an annual 18 percent increase in infrastructure investment; Colombia, as peace gains traction, is just behind at 17.6 percent. In terms of the key countries of the region, and their cumulative infrastructure investment through 2015:
• Argentina will invest a total of $17.9 billion in infrastructure through 2015, with investment levels rising at only 2 percent/year throughout the period.
• Brazil is projected to be the star, investing as much as $229 billion through 2015, with investment levels rising by 18 percent/year to 2105.
• Chile continues to outperform, investing almost 6 percent of GDP in infrastructure, totaling $42 billion, with investment rising by an average of 15.7 percent per year.
• Colombia is the rising star, with infrastructure investments projected to total $33.2 billion over this period, rising by 17.6 percent/year through 2015.
• Mexico’s infrastructure investments are projected total $70.2 billion through 2015, rising at an annual rate of roughly 8 percent.
• Peru’s investment, driven largely by mining developments, will total a cumulative $22.2 billion, with an annual increase in the 15 percent range.
• Venezuela is the single large country in the region not projected to see any rise in infrastructure investment through the period, and will invest just $10.6 billion in power generation, water and transport through the period.
One result of these figures is that, if infrastructure investment is critical to competitiveness, the region is headed down a deeply divisive path, with growing investments by a group of countries (Brazil, Chile, Colombia) while another group of countries, mostly small countries but also including Argentina and Venezuela, show very low levels of infrastructure investment going forward.
Sector performance is projected to change dramatically. By 2015, the region is projected to show dramatic increases in investment levels for water/wastewater, along with urban mass transit. At the same time, surface transportation (mostly highways, but including rail and waterways) will remain the largest single infrastructure sector:
• Surface Transportation — by 2015, $43.6 billion will be invested annually throughout Latin America, a rise of 32 percent over current levels.
• Electricity — by 2015, $26.1 billion will be invested in electricity (generation, as well as transmission and distribution), a rise of 18% above the $17.3 billion project to be invested region-wide in 2010.
• Water/Wastewater — by 2015, fully $17.7 billion is projected to be invested in the water/wastewater sector, an increase of 52 percent over current levels.
• Urban Mass Transit — $12.6 billion will be invested in the urban mass transit sector by 2015, an increase over 2010 levels of 44 percent.
• Ports & Logistics — the ports and logistics sector, having passed recently through a boom, will reach investment levels of $12.9 billion in 2015, 31 percent above current levels.
For more information about CG/LA Infrastructure LLC, please visit www.cg-la.com.