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Major regional infrastructure developments include:
* Guatemala's liberalised electricity distribution market has attracted private interest in many of its assets, making the market the most prolific for energy mergers and acquisitions (M&As) in Central America. Emerging markets-focused infrastructure fund Actis completed the acquisition of two power distribution companies in Guatemala in April 2011. This venture follows the Colombian firm EPM's acquisition of the country's third power distribution company in October 2010. Both ventures corroborate BMI's view - expressed at the time of the EPM acquisition - that, based on macro fundamentals, there is scope for further growth in the market.
* The transport and public works ministry (MOPT) of Costa Rica is planning to invest CRC250bn (US$503mn) in its national transport programme for 2033. The investment includes CRC77bn (US$154.92mn)
* Italian energy producer Enel Green Power (EGP) has started construction work on the 50MW Chucas hydropower plant (HPP) located between the provinces of Alajuela and San Jose in Costa Rica. Once fully operational, the plant will generate around 219 gigawatt-hour (GWh) of power to serve the electricity needs of approximately 81,000 households. The project, expected to be completed in mid-2013, will increase the company's installed power capacity in the country to 105MW.
* Feasibility studies will commence on a new railway project in Honduras, which if implemented will provide a significant source of value for the country's infrastructure sector in the coming years. The railway could also alter the trade dynamics in the country, as it will link the ports of Castilla and Amapala, thus allowing trade to bypass the Panama Canal. The government signed a memorandum of understanding (MoU) with UK company K Group Inc. in May 2011, which will see the company carry out technical feasibility studies to determine the cost and economic viability of the project.
* We expect political risk in Central America to rise over the next 12 months, as electoral uncertainty aggravates existing tensions caused by gaping social divisions and spiralling levels of violence. In terms of electoral violence we believe Guatemala is most at risk, whereas Honduras faces the most serious threat of social upheaval - comparable to the uprisings being witnessed in North Africa.
* We believe the plateau demonstrated by Panama and Costa Rica at the top of the table highlights the rising competitiveness of these markets and disparity with the rest of the region. There is fierce competition between states to attract a limited pool of capital and expertise. As a result of increasing openness to foreign direct investment (FDI), we find a plateau of near identical scores in Industry Risks. The implication is that further structural changes to the regulatory, legal or financing environment can present a significant competitive advantage that can make the market that implements them the regional outperformer.
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About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
