Vital elements of infrastructure are improving exponentially, as government body Fonadin encourages more and more PPPs in Mexico

Introduction

Mexico’s National Infrastructure Fund (Fondo Nacional de Infraestructura, or Fonadin) is the influential and dynamic Mexican government agency set up to manage the development of national infrastructure in Mexico via public-private partnerships (PPPs), focusing on the highways, ports, airports, environment, urban mass transportation, water and tourism.

Today, Fonadin is one of the most important conduits for PPPs in Mexico. Fonadin does this by providing support – financing and know-how – for the planning, design, construction and final transfer of projects developed by the private sector. To be elegible by Fonadin, projects must offer the country significant positive social impact and the prospect of major economic gain.

In pursuit of its goal of nurturing PPPs in Mexico, Fonadin extends support to organisations in the public and private sectors. It supports Public sector bodies including agencies and departments of the Mexican federal government, and similarly agencies and departments of Mexican state and municipal governments. Private sector organisations Fonadin supports include the recipients of concessions, permits or contracts as part of PPPs in Mexico.

Fonadin support of PPPs in Mexico consists broadly of two types of investment: recoverable (which Fonadin would be looking to get back in due course) and unrecoverable (which Fonadin would not necessarily expect to get back). Recoverable funding would typically include subordinated debt (debt with a lower priority for the collection), guarantees and in some cases even equity. Unrecoverable funding usually involves financial support for studies, consultancy and subsidies to support PPPs in Mexico that have a social and/or economic benefit but which offer the prospect of only low financial returns.