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June 23, 2009

Infrastructure

Inter-American Development Bank a tool for Canadian companies

Caribbean, Latin America present opportunities

Canadian companies looking to capitalize on construction opportunities in Latin America and the Caribbean have the Inter-American Development Bank (IDB) as a key tool at their disposal.

“The bank has approved a total of $170 billion in loans and guarantees to finance projects as of the end of 2008,” said Roberto Vellutini, vice-president for countries at IDB. “The bulk of what we do is in infrastructure.”

The IDB was profiled in a recent Export Development Canada (EDC) webinar which looked at the Latin American and Caribbean region’s priorities and opportunities that Canadian construction firms could tap into. The IDB is the main source of multilateral financing for economic, social and institutional development in Latin America and Caribbean.

“In spite of the broad areas we address a bulk of our volume, almost 60 per cent of what we do, is in infrastructure approvals,” noted Vellutini.

Projects strategies for the region that IDB loans and grants help finance address poverty reduction, growth, increasing trade and investment, promote regional integration and modernization. Water and sewage infrastructure, sustainable energy and climate change, and education and innovation are considered priority areas for IDB.

Agustin Aguerre, manager infrastructure and environment at IDB, explained that typical project opportunities were in power generation (hydro, thermal, renewable) transmission and distribution, oil and gas and bio-energy.

Under power generation, civil infrastructure, turbines and control equipment were among the various project procurement possibilities.

Transmission and distribution lines, pipelines and control equipment were also common under procurement needs. Highlights in the 2009 project pipeline are a US$700 million hydroelectric power plant in Tocoma, Venezuela, a US$230 million road infrastructure project between Pasto and Mocoa in Columbia, expansion of water/sewage infrastructure and water treatment in Buenos Aires, Argentina and US$600 million in and wastewater treatment plant rehabilitation in Brazil.

The IDB helps through investment and policy based loans and technical co-operation including technical studies and investment grants. Aguerre said that Canadian companies interested in working within the region and with the IDB need to develop good local contacts, get project information early and follow “meticulously” the bidding documents’ instructions.

“Seizing comparative advantages is important as is making use of embassies, chambers of commerce and professional associations,” Aguerre said.

Also key for any Canadian company looking to work in the region is working through the EDC itself which works in partnership with the public and private sectors and is Canada’s official export credit agency. EDC’s 2008 project volume reached $85.8 billion in 2008 while supporting 8,312 Canadian companies.

Visit www.edc.ca or www.iadb.org for more information.

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