Investment grade rating boosts Paraguay’s infra plans
The upgrade of Paraguay’s long-term credit rating to 'Baa3' by Moody’s will help the country boost private infrastructure investment.
“We have no doubts that this rating represents a great opportunity, especially for infrastructure financing under PPPs and turnkey” mechanisms, Amílcar Guillén, the head of strategic projects division DIPE, told BNamericas.
Moody’s awarded Paraguay the investment grade for the first time in its history on Friday, citing sustained economic growth, efforts across various administrations to diversify the economy and strengthen infrastructure investment.
In a press release, it also highlighted measures to expand access to market funding and preserve fiscal strength, while updating the rating outlook from positive to stable.
The decision mentioned that recent infrastructure investments have contributed to reducing transport bottlenecks, which will facilitate the inflow of private funds.
Moody’s did not reply to a request for comment.
Guillén added he and public works minister Claudia Centurión are in talks to update the main priorities in the country’s infrastructure plans following Moody’s decision, and that this process will include evaluating which projects can be carried out as PPP, turnkey or concession contracts.
The public works ministry has outlined a US$5.5 billion plan to be implemented during the current administration, which will end in 2028.
The plan includes US$3bn for highways, US$1.6bn for water, US$200 million for hospitals, US$100mn for schools, US$105mn for coastal resilience and US$100mn for housing.
President Santiago Peña also said that increased private infrastructure investment will be needed to rebalance fiscal accounts after the COVID-19 pandemic forced a relaxation of deficit norms and led to increased public spending.
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