Development of Private Infrastructure Projects for Public Benefit

On June 26, 2024, the Argentine Securities Commission (CNV) issued General Resolution 1006, extending the special regime that regulates the creation of collective investment vehicles to include those whose purpose is to develop private infrastructure projects.

 

Following the National Government’s policy, the CNV stated that the purpose of the regulation is to extend the universe of collective investment products, incorporating structures that finance private infrastructure projects aimed at providing services of public use or that meet public interest objectives.

 

The CNV also stated that collective investment products are the natural channel for raising savings and investment, essential for developing economies, providing liquidity and financing to investment projects in the country through the capital market.

 

Therefore, the purpose of these collective investment vehicles is to complement public and private resources, in what is called a mixed financing solution, allowing domestic investors to be positioned in a quality financial instrument and, at the same time, mobilize capital market resources towards priority purposes for economic development, such as public and private infrastructure, with a strong federal focus.

 

Closed-end Mutual Funds and Financial Trusts whose purpose is directly or indirectly destined to the financing, investment, and/or development of public or private infrastructure at the federal, provincial, and municipal levels will be considered “Collective Investment Products for Infrastructure Development.”

 

The Resolution allows the underlying asset of the Collective Investment Products for the Development of Private Infrastructure to be integrated with assets directly or indirectly related to the financing of private infrastructure, issued by the contractor, the lender, or a third party, in which the payment is guaranteed by the cash flows of the project or by a specific allocation flow. In this regard, construction certificates, marketable securities, or any other collection rights, taxes, or specific charges may be incorporated as underlying assets.

 

The Resolution incorporated the definition of Private Infrastructure, considering as such private works projects that provide public interest or access services, such as:

 

1.         telecommunications,

2.         data networks,

3.         transportation,

4.         logistics,

5.         ports,

6.         airports,

7.         health and education systems.

 

It also includes their improvements, expansion, and maintenance. The provider is defined as the private entity that owns the private infrastructure services.