Chile's infra financing framework isn't there yet

Banks and other financing institutions see Chile as providing a favorable environment for financing infrastructure and energy projects in Latin America. Still, they think the country could further improve, especially when it comes to environmental approvals and legal certainty.

This was one of the main talking points of a panel of main financiers at the 2nd Chilean Energy and Infrastructure Finance Forum in Santiago.

One panelist, IDB Invest lead investment officer Claudia Florenzano, said in the last few years "there have been some cases" when courts or other entities revoked project approvals, which can impact shareholders or financiers.

In this regard, she considered the government's move to streamline environmental approvals a step in the right direction.

Similarly, Shearman & Sterling LLP's head of project development and finance practice Gregory Tan pointed out that institutional bottlenecks aren't exclusive to Chile, and that there have been only a "few high profile situations" that have attracted the most attention.

"This even involves projects with financial closures that have been canceled or significantly delayed (...). What investors need more than anything is certainty, so the government, by telegraphing ahead some of the changes, is certainly helpful in that regard," he said.

Responding to questions about Chile's US$9bn infrastructure fund approved last year, panelist and Banco Santander's infrastructure head for Chile, Felipe Sotomayor, said the mechanism "with an effective administration could become the country's infrastructure engine in the next few years."