Infrastructure is viewed as an asset class of its own and the
allocation to this investment class is expected to rise
considerably. Project bonds offer an opportunity for institutional
investors to participate in infrastructure projects through listed,
tradable securities that can provide superior risk-adjusted
returns. By Jose A Moran, partner, project finance Chicago, Juan
Carlos de los Heros, partner, Lima and Jose Avila, associate,
project finance, Chicago, Baker & McKenzie.
Peru has developed a payment mechanism applicable to PPP
infrastructure projects that has increased the bankability of such
projects by reducing their construction risk essentially down to a
level equivalent to the nation's sovereign risk. This model has
spurred a steady increase in private infrastructure investment
throughout the country.
