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FIAP > Press Releases > The Retirement Savings Fund Managers must be alert to the possibilities of the Law of Public-Private Associations

The Retirement Savings Fund Managers must be alert to the possibilities of the Law of Public-Private Associations

4 April, 2012

Source: www.inese.es

The Retirement Savings Fund Managers (AFORES) must be alert to the possibilities that may arise once projects start being generated within the framework of the new Law of Public-Private Associations (Apps, see here), said Carlos Pérez Manguía, a specialist in Finance of Instituto Tecnológico de Estudios Superiores de Monterrey (ITESM) Campus Santa Fe.

This law, whose purpose is to foster infrastructure projects in Mexico, was passed by congress in 2011 and signed into law on January 15, 2012. Its regulations are still pending publication. The Mexican Chamber of the Construction Industry (CMIC) estimates that investments amounting to MXN 400,000 million (approx. US$ 31,433 million) could be triggered due to the guarantees this system provides to private initiatives participating in these programs.

In this regard, Carlos Pérez Munguía pointed out that the Retirement Savings Fund Managers (AFORES) must analyze the Development Capital Certificates (CKDs) that are generated through these projects, in order to be able to participate and guarantee the institutional investors returns on their investments. “Although the introduction of this law does not directly increase the channeling of pension fund resources into infrastructure projects, it does provide guarantees for these types of works and their financing,” he added.
One of the fundamental attributes of the APPs law and its regulations is that there will be better planning, an aspect that previously hampered the development of projects due to a lack of legal guarantees. One of the issues resolved through this new law is that there must be free right of way from the outset, a factor contributing to greater certainty in the development of infrastructure works.

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FIAP > Press Releases > The Retirement Savings Fund Managers must be alert to the possibilities of the Law of Public-Private Associations
4 April, 2012

The Retirement Savings Fund Managers must be alert to the possibilities of the Law of Public-Private Associations

Source: www.inese.es

The Retirement Savings Fund Managers (AFORES) must be alert to the possibilities that may arise once projects start being generated within the framework of the new Law of Public-Private Associations (Apps, see here), said Carlos Pérez Manguía, a specialist in Finance of Instituto Tecnológico de Estudios Superiores de Monterrey (ITESM) Campus Santa Fe.

This law, whose purpose is to foster infrastructure projects in Mexico, was passed by congress in 2011 and signed into law on January 15, 2012. Its regulations are still pending publication. The Mexican Chamber of the Construction Industry (CMIC) estimates that investments amounting to MXN 400,000 million (approx. US$ 31,433 million) could be triggered due to the guarantees this system provides to private initiatives participating in these programs.

In this regard, Carlos Pérez Munguía pointed out that the Retirement Savings Fund Managers (AFORES) must analyze the Development Capital Certificates (CKDs) that are generated through these projects, in order to be able to participate and guarantee the institutional investors returns on their investments. “Although the introduction of this law does not directly increase the channeling of pension fund resources into infrastructure projects, it does provide guarantees for these types of works and their financing,” he added.
One of the fundamental attributes of the APPs law and its regulations is that there will be better planning, an aspect that previously hampered the development of projects due to a lack of legal guarantees. One of the issues resolved through this new law is that there must be free right of way from the outset, a factor contributing to greater certainty in the development of infrastructure works.