Archivos de la categoría: Berke Report (en)

Our partner Martin Carlevaro, specialist in charge of the infrastructure and APPs practice, is interviewed on 12/18/2020 by Horacio Ferraro of 5 Días TV about the infrastructure projects that are currently in the pipeline in Paraguay.

Recently, the Ministry of Industry and Commerce issued the long-awaited regulation for opening Simplified Joint Stock Companies or “EAS” (according to its initials in Spanish) through the Unified System for Opening and Closing Companies – SUACE

This way, the process for opening an EAS will be performed by registering the electronic file in the SUACE System, which is complete when the USER (founder shareholder/s of an EAS) creates an electronic identity on www.paraguay.gov.py, validates the same through SUACE and fills the single registration form.

Finally, the User must upload this document and the Articles of Incorporation, once they are printed / signed / scanned, as well as all the required supporting documentation, and “register” the “EAS” opening electronic file. Electronic or digital signature may be used.

The electronic file will be sent to the General Directorate of Legal Entities and Final Beneficiaries for analysis, approval and registration.

The Regulation establishes minimum deadlines for notices, which shall not exceed 3 business days in any case, so the process for opening an EAS is currently the fastest in the Paraguayan legal system

Said Resolution does not include transformation, closure, dissolution and liquidation processes of EAS, which will be regulated in specific resolutions to be issued by the same Office.

For more information, contact us at

– carla.sosa@berke.com.py

– federico.valinotti@berke.com.py

BKM|BERKEMEYER

Through Resolution No. 69/2020, published on Saturday, November 7th, the Tax Administration sets regulations for certain aspects of the Personal Income Tax, providing at the same time new forms (sworn statements) to submit tax settlements.

The Tax Administration «construes» Law No. 6380/2019 and defines the scope according to their criteria, divided into two general chapters of: i) Capital income and, ii) Incomes derived from personal services, addressing also matters regarding related documentation and records

Scope of capital income is specified in relation to matters such as: anticipated inheritance, real estate leasing, withholdings, dividends, registration/cancellation of duties, among others.

On the other hand, income from personal services refers to income in kind, dependents, income by minors, alimonies, subsidies, recreation, prepaid medicine, housing, construction/remodeling/fixing, documentation/valid receipts, withholdings.

The new development in this regulation is the fact that it clarifies that real estate sales by individuals should be documented only by withholding receipts and not by issuing exempt invoices. This is extremely important as implies that the sale and purchase prices are not required to be stated when declaring VAT amounts because they are not covered by said type of tax.

For more information, please contact

federico.valinotti@berke.com.py

carlos.vargas@berke.com.py

mauro@mascareno@berke.com.py

BKM | BERKEMEYER

On Saturday, November 7th, the Tax Administration published General Resolution No. 70/2020 in order to set regulations for certain aspects of Taxes on Dividends and Profits (IDU), specifically the obligation to file Informative Statements (DJI).

The Tax Administration «construes» Law No. 6380/2019 and defines the scope according to their criteria, addressing issues such as: i) filing of DJI by the «EDGUR» within the sixth month following the closing of the fiscal year, ii) information required to be provided to SET (date of meeting or the like, reported fiscal year, total amount of profits, amount to be distributed, etc.).

We emphasize on the importance of clarity when drafting the minutes regarding meetings of shareholders or stakeholders, as these documents must be attached to the DJI, and ambiguous or unclear drafting could give rise to IDU’s claims.

For more information, please contact:

federico.valinotti@berke.com.py

carlos.vargas@berke.com.py

mauro.mascareno@berke.com.py

BKM | BERKEMEYER

Frigorífico Concepción from Paraguay issued bonds in NY under Rule 144A / Regulation S for a value of USD 40 million. The Bolivian subsidiary of said issuer established guarantees on the debt, in addition to a number of properties in Paraguay and receivables from activities in Bolivia and Paraguay that were set as guarantees on behalf of the investors. To this end, a guarantee trust was created in Paraguay with Finexpar as trustee and Wilmington Trust acting as beneficiary. Wilmington Trust was also the Trustee in the Indenture under New York law.

The bonds expire in 2025 and accrue an interest rate of 11%. Oppenheimer acted as underwriter for the operation

Although issuances in international capital markets are not common for companies incorporated in Paraguay, this is the second debt offering from Frigorífico Concepción this year, being a “retap” of the USD 100 million issuance in January 2020.

With the proceeds from the last issuance, Frigorífico Concepción aims to increase production at its meat production facilities in Paraguay, as well as cancelling existing debts and funding the expansion of the meat production facilities in Bolivia.

Frigorífico Concepción ranks among the top five exporters of meat products in Latin America. Its facilities can accommodate up to 40,000 head of cattle. The Concepción Group exports meat products to more than 30 countries through eight subsidiaries that operate in the processing industry.

Wilmington Trust Advisor

BKM | Berkemeyer

ugo Berkemeyer and Martín Carlevaro, Partners, and Milena Sljivich, Associat, in Asunción

On December 15, 2020, the second Addendum to the PPP Contract for Routes 2 and 7 project in Paraguay was signed between the PPP Contractor Rutas del Este and the Contracting Administration represented by the Ministry of Public Works and Communications. The first addendum was signed on November 28, 2018 and contained mainly modifications requested by the financiers in order to facilitate the financial closing of the project (changes that turned the same into a bankable project, which is why it is often called a bankability addendum).

The following changes are incorporated through this second addendum:

• Certain start and completion dates for sections of works are modified and consequently the construction phase of the project is extended.
• Work adjustments are made in some sections that generate additional costs which will be handled through a compensation account, while deferred investment payments (fixed and irrevocable and payable in USD) and availability payments that remunerate O&M of each section remain unchanged.
• Additionally, one of the sub-sections of the work is eliminated from the contract, and the possibility for introducing additional work may be agreed and implemented in the future to replace it. Said additional work is valued at up to USD 12 million (at present value) and must be compensated through the clearing account if built.

In response to the aforementioned changes to the project, Rutas del Este is entitled to additional compensation consisting of (i) further sectioning that generates earlier accrued deferred investment payments, thereby improving the risk profile of the project; and (ii) creation of an account where additional investments by Rutas del Este are offset through payments (quarterly) from the State until the net present value of these additional investments reaches zero by applying the Equity IRR (internal rate of return of sponsors).

The clearing account is fed by a portion of the increase in tolls to be determined by the Contracting Administration (in line with the toll values ​​of another contiguous road concession: Tape Pora). And there will also be a minimum contingent annual payment (top up payment) from the State in case a certain annual threshold is not reached at toll collections. This minimum annual payment will be such that the clearing account is maintained, as a compensation mechanism to the concessionaire, for no more than 8 years.

In view of the current financial contracts, the corresponding consents were obtained from the project’s financiers for the signing of the addendum.

BKM|Berkemeyer, through its partner Martín Carlevaro and associate Vivian Maldonado, were the legal advisor of Rutas del Este S.A., and sponsors: Sacyr Concesiones SL and Ocho A S.A.

The sponsors also acted through their inhouse lawyers: Laura Cabrera for Sacyr Concesiones and Juan Guiñazu for Ocho A

At the end of December 2020, Frigorifico Concepcion issued international bonds in NY under Rule 144A/Regulation S for a value of USD 21 million, which meant a new reopening, after the issuance of USD 100 million in January and the first retap of October 2020 for USD 40 million, all expiring in 2025 and 11% interest. BKM Berkemeyer was once again legal advisor to Wilmington Trust, National Association, who acts as Indenture Trustee (under NY law) and as beneficiary of a guarantee trust established under Paraguayan law.

With the proceeds from the last two issuances, Frigorifico Concepcion aims to increase production at its meat production facilities in Paraguay, as well as to pay off existing debts and fund the working capital necessary for the construction of a new plant in Bolivia.

A subsidiary incorporated in Bolivia, owned by Frigorífico Concepción, acted as guarantor of the debt and the collateral is represented by real estate and accounts receivable.

BKM Berkemeyer’s participation consisted in the review of all the reopening documents from the perspective of local legislation, especially the guarantee trust contract established in the country, whose autonomous patrimony serves as collateral for the entire operation as well as the review of the other documents of the transaction, such as the offering memorandum, the indenture and acknowledgments.

Frigorífico Concepción is among the top five exporters of meat products in Latin America. Its facilities can house up to 40,000 heads of cattle. The largest company brand, Grupo Concepción, exports meat products to more than 30 countries through eight subsidiaries that operate within the processing industry.

On behalf of BKM, Milena Sljivich, Senior Associate, and Martín Carlevaro, Partner, participated in this transaction.

Recently, the Executive Branch published Decree No. 4644/20, whereby the “Special Rules for valuation of Operations” (the “Rules”) are regulated, name given by the new tax law gives in our country to those usually known as transfer pricing rules.

Indeed, Law No. 6380/19 (the “Law”), which implemented the tax reform, emphasized the modification of the regulatory design of income taxation, adopting international standards, being one of its columns the introduction of transfer pricing control rules, although with some adjustments.

However, the haste with which the reform was carried out and subsequent appearance of the pandemic, caused that regulation and adjustment of this Corporate Income Tax (“IRE”) chapter be deferred to these times.

However, the entry into force of these special rules as of January 1, 2021 (for most of the cases), when the regulatory decree has just been published, is still remarkable.

On the other hand, as the Law already announces, and it could not be otherwise, the arm’s length principle -known to all- is the one that founds and gives basis to the transfer pricing regulatory complex. Thus, applying the aforementioned principle, when associated or related companies carry out transactions under conditions different from those that would usually be agreed upon by independent parties, the benefits that would have been obtained by the local company in the absence of such conditions may be adjusted -for tax purposes- and include said benefits to be taxed under the IRE.

The principle promotes tax neutrality and pursues an arm’s length model where arbitrary price distortions arising from the factual reality of the common management of a group of companies are eliminated, that is, it seeks to neutralize the existence of controlled transactions through the application of market prices, while avoiding erosion of the tax base of income taxation and the transfer of incomes to jurisdictions with non or little taxation.

A legal novelty of the regime is that the Rules will affect not only IRE taxpayers who carry out operations with non-resident related companies, but they are also included as operations subject to analysis and adjustment when they are carried out with local / resident persons who are exonerated, exempt or not covered by said tax.

Furthermore, following certain models, the Rules provide that, unless proven otherwise, operations with related parties are those carried out with companies that are in jurisdictions with non or low taxation, such as those carried out with users of free zones or maquila entities.

The Law has already defined the related parties in a fairly broad way, such as when two or more people participate directly or indirectly in the control and/or capital of the other or others, taking as parameter the participation of more than 50% of the share capital with voting rights. In addition, it is considered that there is participation in control of the person, when one has the factual capacity to influence the commercial decisions of the other, through -for example- appointment of managers, officers or directors, contractual dominant influence, functional influence or credit rights, in short, any case in which a person can significantly guide or define the activities of the other person/company.

Certain clarifications were expected in the regulations of this concept, which did not occur, so there are still some doubts regarding this definition, which will remain until they are clarified by the Administration or until judicial rulings are issued, which would be happening in a long time.

Those who must apply the Rules will determine their income and deductions, considering operations that do not comply with the arm’s length principle, the prices and considerations that they would have used with or between independent parties in comparable operations, with similar conditions, under risk of the penalty consisting on the Tax Administration determining income -and deductions- ex officio after applying the same principle.

Regarding the valuation methods, the Rules include traditional methods such as: i) uncontrolled comparable price, ii) resale, iii) added cost, iv) profit sharing, v) profit sharing residual, vi) transactional profit margins and, a seventh method – known before as the «sixth method», of Argentine roots and which follows the previous «Export Price Adjustment», provided for in Law No. 5061/13, currently out of force, applicable to certain commodities (soybeans and their derivatives, corn, rice and wheat).

This «seventh method», was created according to the Federal Administration of Public Revenues («AFIP») to fight an apparent scheme of international evasion consisting of the export of primary products from Argentina, using intermediaries without real functions and/or without economic substance, constituted in opaque jurisdictions and/or in countries with non or little taxation.

Applying the seventh method according to the provisions of Decree No. 4644/20, when the exported goods do not match prices quoted in transparent markets, the price must be adjusted to the date of shipment completion or the day before there is a quote or the date indicated in the Register of Future Contracts, being this a taxable amount on which the IRE rate must be applied directly, regardless of other incomes and expenses. This is a worrying provision because its wording is not in accordance with the Law and could lead to litigation in the future.

Finally, the decree delegates a number of operational issues to the Tax Administration, which must still issue resolutions in order to have a clearer picture of the practical application of the Rules. ´

However, it is clear that Paraguay is trying to include and apply the guidelines of international organizations in order to project a better image of the country, so the Rules, as well as other measures, are here to stay, along with other legal developments in the tax area.

For more information, please contact our experts, federico.valinotti@berke.com.py, mauro.mascareno@berke.com.py and carlos.vargas@berke.com.py.

On February 23, a total of 26 trade unions have submitted to the Ministry of Finance a joint petition, requesting the Ministry of Finance and/or the Registry of Legal Persons and Final Beneficiaries, the non-application or at least the application of the minimum fine corresponding to sanctions for formal breaches provided for in Laws No. 5896 and 6446/2019 and their regulations.

The position and request of the unions is based on the fact that the aforementioned legal regulations reach the border of unconstitutionality, granting a high level of discretion to the Administration at the time of considering the facts that may or may not give rise to the reduction or non-application of sanctions, so it could be legally admissible for multiple reasons, apart from its confiscatory nature.

However, the COVID-19 pandemic scenario and the sanitary measures (confinement and others) taken by the National Government to prevent the spread of this virus have created the ideal setup for all kinds of delays in processing and/or execution of these administrative processes, delays that are attributable to both the public and private sectors.

However, according to the document, these delays have a common denominator which is precisely a force majeure cause that protects the sanitary measures taken by the National Government, such as confinement, teleworking, home office, work by shifts, group or individual confinements, appointments to withdraw documents and finally an accumulation of situations that undoubtedly gave rise to alleged formal breaches due to communications made to the Registry of Legal Entities and Final Beneficiaries after the deadline and, which leave latent the possibility of applying the high fines provided by the Law for a scenario that we can call “normal”.

In addition, unions expressed that the situation given in 2020 and even today is «exceptional», therefore, it requires a legal response of the same dimension, thus the Law itself refers to the application of sanctions to Law No. 125/91 which in Art. 185 item “b” gives the force majeure cause or fortuitous event sufficient merits to exclude a person from liability.

Thus, through the aforementioned petition, trade unions such as: Paraguayan Industrial Union (UIP), National Chamber of Commerce and Services of Paraguay (CNCSPy), Center of Importers of Paraguay (CIP), Chamber of Advertisers of Paraguay (CAP), Association of Christian Entrepreneurs (ADEC), Paraguayan Chamber of Supermarkets (CAPASU), Union of Production Guilds (UGP), Rural Association of Paraguay (ARP), Chamber of Entrepreneurs of Ciudad del Este and Alto Paraná; have requested the application of minimum fines for the case and even the non-application of fines due to force majeure in accordance with art. 185 item b of Law No. 125/91.

For more information, please contact:

Bruno Lafarja bruno.lafarja@berke.com.py

Mauro Mascareño mauro.mascareno@berke.com.py

Federico Valinotti federico.valinotti@berke.com.py

I.- INTRODUCTION

In recent decades, a remarkable macroeconomic, tax and currency stability has been established and consolidated with a neat and careful management of public accounts, as well as respect for long term compromises that provide a safe framework for investors. All these are added to the good profitability rates that the country offers based on a very convenient cost structure (labor, taxes, energy, among others) and a wide range of business opportunities, considering that it is a country that still has many economic sectors in development process. These conditions that Paraguay has been building over the years encourage long-term investments in the real economy and generate confidence in the private sector, including investment in public or private infrastructure. Paraguay seems to be a clear example of a favorable ecosystem for private investment in public infrastructure through various procurement mechanisms with unique characteristics that attract different types of contractors (and lenders) with different risk profile.

In addition, it should be noted that the covid pandemic and measures taken by current government to fight it have generated a natural retraction of the economy, and therefore the country has post-pandemic recovery plans on hold, which aim to inject resources, in the short term, for recovering and boosting economic activities, including investment in infrastructure projects, given the multiplier effect that this type of investment has and the rapid effect on GDP growth.

However, Paraguay requires a very important investment in infrastructure, a sector with a deficit of about 27,000 million dollars (in transportation, social infrastructure, health and energy transmission, among other sectors) and a resources shortage¹ to face such deficit from the public sector, based on scarce tax collection and especially considering the current level of the fiscal deficit, which exceeds the threshold of fiscal responsibility law², due to indebtedness increase caused by an increase in public expenditures caused by the pandemic. Moreover, this double deficit (in resources and infrastructure) decelerates the good GDP growth that Paraguay has been showing each year, acting as a true “bottleneck” by substantially raising logistics costs for the transfer of products, exports, etc.

II.- PUBLIC PROCUREMENT MODALITIES

Conditions described busted the impulse for different procurement process modalities beyond the traditional public works that requires available public resources or public debt (not always possible or convenient) and therefore put Public Private Partnerships (PPP) on an unbeatable position, since with an adequate design and efficient risk distribution, private investments in infrastructure can be achieved without necessarily increasing the level of public debt and fiscal deficit, since the private participant assumes certain risks that in another type of public procurement they would not, reverting the infrastructure to the State when PPP contract expires. Paraguay’s PPP law was enacted in 2013 and there is currently a project that has already obtained financial closure in 2019 through the issuance of international project bonds and support from a multilateral entity, specifically the Routes 2 and 7 project, an investment of USD 550 million, a 30-year concession.

Another procurement process used in Paraguay and that allows the temporary oxygenation of public resources is called «Turnkey», also known as public work with funding from the private sector or as Design, Build and Financing (DBF), called the «German System». The description of this modality is usually simplified, differentiating it from PPPs (DBFOM) due to the lack of operation and maintenance (O&M), although there are other differences in terms of the approach to the risk allocation, steps for structuring the project and the non-creation of a company with a specific purpose vehicle (concessionaire) to be constituted by the awarded bidder as in the PPP.

This modality extends the payment term of investment by the State, instead of facing periodic payments per milestone achieved (for instance, monthly certificates) on design and construction during works execution (with an advance payment) as provided in traditional public works under Law 2051/2003. Typically, a turnkey project allows the State to start paying capital and interest once the work is completely finished and in 10-year semi-annual installments with a 3 years grace period (according to bidding terms). This not only allows delayed payment for infrastructure (of course, with the consequent payment of higher financial costs) but also transfer of construction and other risks to the private sector, starting to pay only once the works are finished and under the “lump sum turnkey” modality, which evidently increases chances of project completion on time (since in the meantime the contractor does not get paid) and also there are less chances of having higher costs than those offered in the bid which was awarded to the best economic offer under the fixed lump sum system (instead of unit prices as typically happens in traditional procurement). This is achieved given that incentives for both parties are aligned in terms of the completion of the work on time and, in addition, the transfer of several risks to the private contractor allows the cost overruns to be absorbed and prevent claims and works stop.

Regarding the way in which these types of projects are financed, it does not differ substantially from a Peruvian PPP (which mitigates construction risk through the issuance of RPI CAOs) where capex is divided into tranches or construction milestones whose completion generates an unconditional and irrevocable right of collection deferred in time (autonomous from the underlying contract), a future cash flow that is usually securitized through bond issuances (in the local or international market) or assigned to a lender who pays the private contractor for the transfer of those collection rights with a discount -whether or not they are instrumented in titles or certificates- anticipating the funds (although without assuming performance risk) and replaces it in its position as long-term creditor of the State that receives the investment, thus assuming the sovereign’s payment risk. Typically, the working capital needs within each tranche (prior to completion) are financed with another type of lender that assumes the contractor’s construction and performance risk, although it does not assume the sovereign risk of payment -except in the case of early termination- since it does not keep the credit receivable but its repayment comes from the funds of the long-term loan (that is, the risk profile of this debt is exactly the opposite of long-term debt).

There are 3 awarded DBF projects, two of them are already funded: Naranjal (USD 60 million), fully executed (completion in 2020), and Bioceanic Corridor (USD 450 million), funded in 2019 by the first issuance of an international project bond (144A/Reg S) in Paraguay.

These projects were publicly tendered under Law 5074/2013, which complements and regulates law 2051/03 on public procurement introducing the deferred payment “turnkey” public works regime that entrusts the design, construction and financing (DBF) to the private sector.

There are also other public procurement modalities, rarely used in Paraguay today, although they were used in the past, such as Shared Risk Contracts (Joint Ventures) entered by the State and a private company for developing activities under Law 117/1991, as well as the Concession Law No. 1618/2000 to grant public works and services as concessions through a delegation (by a law for each project), signing a concession contract with the concessionaire for a certain period of time. Currently, there is a road concession on Route 7 granted to Tape Pora as concessionaire, initially set with expiration date in 2023 but extended until 2053 by a Congress law.

III. TURNKEY FOR ELECTRIC POWER TRANSMISSION PROJECTS

Firstly, it is important to note that Law 5074/2013 already provided for a possibility of tendering electricity transmission lines under the turnkey modality. However, it is a prevailing interpretation that said law only allows Central Administration authorities to act as contractors, namely national ministries, preventing a decentralized entity such as ANDE (National Electricity Administration) from being a contractor. That unless an interjurisdictional agreement is signed with the central administration as, for example, happened with the DBF sanitary sewerage project in 2016 (investment of USD 600 million) where the Ministry of Public Works signed an agreement with ESSAP (Empresa de Servicios Sanitarios de Paraguay).

ANDE is an autarkic, decentralized institution from the Public Administration, with legal status and own equity that has among its functions the acquisition of electricity, generation, transmission and distribution works, and other facilities and means necessary for the normal operation of electric services in Paraguay.

In view of the foregoing, Turnkey Law Nº 6324 was enacted in 2019 enabling ANDE to tender this type of project, also taking the chance to introduce several improvements considering the lessons learned from projects tendered before under Law 5074.

In summary, the aforementioned law grants a sovereign guarantee from the Paraguayan State over certain electricity distribution and transmission works to be implemented by contractors to be selected by ANDE and offers the following aspects as an innovation:

• Authorization for a package of 24 specific works detailed in the Law, a total estimated value that is up to USD 300,000,000³. However, ANDE, with the authorization of the Executive Branch, can add other works that are considered necessary.
• Works must be carried out under a modality based on private financing provided by the supplier or private contractor.
• Sovereign guarantee is implemented according to a regulation from the Executive Branch. As of the date of this document, this regulation is pending of issuance.
• ANDE as contractor and the Paraguayan State as guarantor will sign the necessary certificates to implement the recognition of the obligation to pay for the works (as the milestones are met), known as CROPs and, such titles are transferable, unconditional, irrevocable, and autonomous from the underlying contracts.
• Bidders must have secured the necessary funding for the complete execution of the works, including the respective projects, consultancies and works audits.
• Although works contracts would in principle be governed by the law and jurisdiction of Paraguay, the Executive Branch is allowed to choose the laws of New York or London as applicable and also choosing jurisdictions in favor of those courts.
• In the event of breach of the construction contract or the guarantee of the Paraguayan State, and in the event of litigation, Paraguay cannot assert sovereignty immunity in its defense.
• The State and ANDE are authorized to approve provider credits with a guarantee from the Multilateral Investment Guarantee Agency (MIGA) of the World Bank or other similar agencies (ECAs).

IV. FINAL RECOMMENDATIONS

It is expected that the bidding terms and the regulation to be issued by the executive branch for this specific turnkey legal framework for ANDE’s projects will introduce certain additional improvements that potential bidders (and lenders) interested in participating could validly expect in the structuring of these projects, in light from previous experience, such as:

• CROPs should be allowed to be assigned without prior authorization from the State (as in Panama or Peru).
• Larger sectioning or number of milestones (and therefore more CROPs), lowering the scope of each of them (individually) in order to reduce working capital needs and also CROPs shall be issued once the acquisition and reception of materials is certified.
• Clearly regulate the issuance of monthly advance certificates and the possibility of freely assigning them to potential working capital lenders.
• Clearly establish the items of investments already made (and not amortized) that will be paid upon early termination and an interest rate applicable in case of default.
• Provide conditions in terms of management of Right of Way, permits, environmental licenses and other risks retained by the public sector in order to reduce timing between award and financial close. That will reduce uncertainties in terms of final interest rate applicable.
• Provide for the possibility of awarding by lots, in which case the bidders may present improvements in the offer in the event of awarding more than one lot simultaneously.

In case regulations and bidding terms include the improvements described herein, the success of the call is ensured, with many international bidders (and lenders) participating and these projects so necessary for effective and safe electricity transmission will be implemented in Paraguay, a country that produces abundant hydropower due to Yacyretá and Itaipú dams.

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[1] Due to the lower level of activity because of the pandemic and also due to the very low tax rates (10% VAT and 10% income tax), compared to other countries in the region.

[2] The fiscal deficit increased from 2.8% in 2019 to 2020 (pandemic year) and went up to 6.5% of GDP due to debt taken on sovereign bonds (and other sources) for health expenses. The maximum limit established by the fiscal responsibility law for said deficit is 1.5% and up to 3% in exceptional cases.

[3] It is expected that these 24 works (including substations, medium voltage lines, distribution networks) will be tendered grouped into 2 or 3 projects in order to generate volume that is attractive to large international lenders and construction groups.

MARTIN CARLEVARO

Martin.carlevaro@berke.com.py

BKM | BERKEMEYER