Big corporates lead the way in LatAm capital equipment

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22 October 2009

As Latin American countries invest in a variety of infrastructure and energy projects Dickon Harris examines the big drivers for capital equipment financing in the region.

Latin America has seen a healthy demand for capital equipment thanks to a variety of state-backed infrastructure projects revolving around energy and transportation. Unsurprisingly, Brazil in particular remains the big driver in the region. Banks and export credit agencies (ECAs) appear to have an endless appetite for Brazil thanks to its strong macro-economic fundamentals.

By far the largest amount of demand has come from Brazilian oil company Petrobras as it seeks to develop its offshore pre-salt oil fields. In January Petrobras announced investment plans of $174.4 billion over the next five years. So far it has raised approximately $31.3 billion in financing during the first half of 2009 including $10 billion from China Development Bank (CDB), $2 billion from US Ex-Im, with an option for an additional $3 billion and approximately $6.5 billion from the capital markets. BNDES has also supplied $12.8 billion which could then be extended by an...

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