ESG securities are gaining ground in Latin America’s infrastructure market, and the winner of the Infrastructure Bank of the Year in the Andes played a key part in the placement of one of the most impressive examples of this trend.
Banco Santander was the joint bookrunner for the Puerta de Hierro 4G toll road deal that included the first social project bond ever issued by a Latin American sponsor.
The deal, worth $209 million, exemplifies what Benoît Felix, the global head of Structured Finance at Santander Corporate & Investment Banking, considers the potential of the region for the structuring of ESG deals.
“Puerta de Hierro employed a social bond that was issued in a very complicated environment. It is the kind of deal that is not only relevant for the region, but that we also hardly see even in supposedly more advanced financial markets, such as Europe,” he tells LatinFinance. “A large share of infrastructure projects in Latin America have a positive social impact. We are now highlighting this positive impact on communities to meet investor demand.”
Puerta de Hierro is the Local Currency Financing of the Year in the 2021 Project & Infrastructure Finance Awards. Another winner, where SCIB played a leading role, is the $132 million Salaverry Port loan, the Port Financing of the year.
The deals went ahead in a challenging environment marked not only by the ravages of the Covid-19 pandemic, but also by social disruption in Colombia and political uncertainty during a polarizing election period in Peru.
“The business environment continues to be complex, but we are working in several projects in the region, and there is still investor appetite for the infrastructure sector,” Felix says. “No matter whether governments are from the right or from the left, there is usually a consensus in the region that it is necessary to invest in infrastructure.”