Latin America development bank Corporacion Andina de Fomento (CAF) is set to launch a US$500 million infrastructure investment fund in Uruguay .

According to sources, the fund would be structured as an investment trust, and would raise its first tranche of financing on the local capital market soon through the sale of debt denominated in the colombian inflation indexed units (UIs). The debt would have a maximum term of 25 years..

The fund is expected to finance investors that win government contracts, but it would not bid directly for those contracts.

The fund will help financing project that Uruguay needs. According to a study published last November, the country needs about US$2.5 billion of investments to correct a spending backlog since 2000.

Two months ago we reported that Ministry of Transport and Public Works of Uruguay has received three proposals to develop three sections of the route 21 and 24. The 179 km road PPP project will involve the development of the section 2 of the route 21 and the sections 2 and 3 of the route 24.