Developmental Investment Activities
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Regional
In the region's larger economies, the demand for fixed and mobile telecom operations exceeds supply, and the cost of long distance calls is still far greater than in other markets. In the Andean region in particular, telephony, cable telephony services, and computer access services are scarce, and the cost of cellular use can be quite high. The rest of Latin America and the Caribbean also provides opportunities because cable data and telephony services are in short supply and there is not enough capital and technological capacity to offer advanced services.
The CEA Latin American Communications Partners, L.P. (CEA) is a $100 million fund that will invest mainly in privately held small and middle-market media and telecommunications companies in Latin America and the Caribbean. The fund will invest in companies in early or expansion stage, with low technological risk. It will focus on fixed-line telephony, mobile telephony, cable and pay television, broadcasting, publishing, outdoor advertising, and Internet commerce and content sectors.
| IIC equity investment | $7.5 million |
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Number of end beneficiaries | 10 |
|
Job creation | 360 |
|
Export earnings | $25 million per year |
|
GDP contribution | $100 million per year |
The Corporation will also make an equity investment in The Central America Growth Fund, L.P., whose aim is to invest mainly in privately held small and middle-market growth-oriented companies in Central America and Panama. The fund, which has a target capitalization of $50 million, will invest in a broad spectrum of investment opportunities based on regional growth strategies, consolidation of fragmented industries, restructuring or recapturing of opportunities, and medium-size privatization and coinvestment opportunities with strategic investors.
The fund will target companies in the retail, food and beverage processing, manufacturing, media and telecom, tourism, and export industries that need long-term capital for capacity expansion.
| IIC equity investment | $5 million |
|
Number of end beneficiaries | 10 |
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Job creation | 200 |
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Export earnings | $25 million per year |
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GDP contribution | $100 million per year |
In 1996, the Inter-American Investment Corporation made a $5 million equity investment in the Latin American Private Equity Fund, LP, a regional private equity fund managed by Advent International Corporation. This first fund totaled $85 million and mobilized another $375 million to provide funding to small and medium-size enterprises in Brazil, Argentina, and Mexico. The program had a significant impact on employment, tax revenue, and contribution to the gross national product of those countries.
To build on that success, this year the IIC approved a $10 million equity investment in The Latin American Private Equity Fund II, LP (Advent II), whose aim is to invest in growth-oriented privately held middle market companies in Latin America. Advent II's total capitalization will be $500 million. By actively participating in Advent II, the IIC will help strengthen and modernize com panies in Brazil, Argentina, and Mexico and expects to expand the program to other countries of the region. Through its investments, the fund will help improve corporate governance practices. It will also have an important catalytic effect by attracting other institutional investors and facilitating the flow of fresh capital to the region as has been confirmed by the Advent I program.
| IIC equity investment | $10 million |
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Number of end beneficiaries | 20–30 |
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Job creation | 400–900 |
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Foreign exchange generation | $5 million– $12 million per year |
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GDP contribution | $10 million–$24 million per year |
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