Financing Mexican public infrastructure projects with pension funds should be evaluated on an individual basis to ensure maximum profits, local financial group IXE analyst Carlos González told BNamericas.
"Right now, this possibility is being looked at from a broad perspective, but each investment should be examined on a case-by-case basis. The advantages of using pension funds as a financing medium depend on the nature of the investment," González said.
This financing mechanism is positive and it could even be a natural way to carry out public infrastructure projects, considering the timeframes involved, he added.
"Investments financed with pension funds are long term, and infrastructure projects require investment with that type of horizon," González said.
"They take time to mature and their benefits are only perceived after some years have passed. In the end, they are likely to produce high levels of profitability," he added.
While the global financial crisis has prompted commercial banks to restrict access to credit, public infrastructure projects should not be affected as long as there are mechanisms to allow pension funds to be used as a source of financing, the analyst said.
"However, project continuity will depend greatly on whether or not these projects are financed adequately. We must be careful about guaranteeing resources as the projects themselves must be viable," said González.
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