Washington, D.C.–The number and value of infrastructure projects in Latin America is ballooning, pointing to expanding economies for a number of countries in the region, according to a recent report by CG/LA Infrastructure L.L.C., an infrastructure specialist. Such growth also points, indirectly, to expanding demand for residential properties in that part of the world, as an infrastructure-inspired multiplier effect cascades through the economies in question.
A 2010 study done in North America by Smart Growth America estimated that for every $1 billion spent on highway projects–always a major infrastructure component–2.4 million job hours are created, including directly through construction and indirectly in other sectors. For every $1 billion spent on public transit, 4.2 billion job hours are created. The effect might not be quite the same on the economies of Latin America, but even if the raw numbers are different, the multiplier effect will be similar.
According to CG/LA’s latest annual list of the top infrastructure projects in Latin America, total project value is greater than $200 billion, equivalent to more than 5 percent of the region’s GDP, and with the potential to create over 3.1 million new jobs. Key drivers are Brazil’s massive oil and gas investments, the global commodities boom, and the 2014 World Cup and 2016 Olympics in Brazil.
The list, which includes over 75 projects, covers 10 distinct infrastructure sectors: airports, bridges and highways, electricity generation and transmission, new infrastructure, oil and gas, ports and logistics, freight rail, urban mass transit, digital infrastructure, and water and wastewater. CG/LA asserts that each of these projects will offer strong business opportunities over the next three to 12 months.
“Not only are these projects strategic to the region’s growth, but for the first time you can see a coherent set of projects that will transform Latin America,” Norman F. Anderson, president and CEO of CG/LA, notes in a statement. “Brazil is leading this process, growing at 4 percent to 5 percent, and beginning a long-overdue infrastructure build that dominates the list in terms of project value.”
Offshore oil and gas platforms in Brazil by oil giant Petrobras top the list, representing a $25 billion infrastructure investment. Other major infrastructure projects in Latin America include the Rio/São Paulo High Speed Train ($18 billion); Costa Rica’s Port Moin Container Terminal Concession ($992 million); the Peru Gas Pipeline to Trujillo (US$1.5 billion); Colombia’s Autopistas de la Montaña (Mountain Expressway) ($2 billion); and the Guarulhos Passenger Terminal Expansion in Brazil ($2 billion).