Best Government Infrastructure Strategy, Latin America 2016
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Best Government Infrastructure Strategy, Latin America 2016

Colombia

In the fast lane

Colombia has finally got serious with building roads, and the 4G infrastructure programme has focused interest from investors and allowed for better co-ordination of financing. 

The National Infrastructure Agency’s (ANI) 4G programme took significant, innovative strides in terms of financing in 2016, as it gets creative in raising the roughly $17bn needed.

With so much required, FDN (Financiera de Desarrollo Nacional), the infrastructure development bank in charge of sourcing this financing, has a huge task. 

Recognising this, Colombia’s president Juan Manuel Santos and finance minister Mauricio Cárdenas stuck to their guns with a politically unpopular decision to finally privatise power company Isagen in January. Proceeds of the sale were partly used to inject FDN with $900m of capital and allow it to double its ticket size on loans for each project from $70m to $140m.

FDN also facilitates funding from other sources. To attract more money from institutional investors, it has helped set up specialist debt funds to lend to projects, typically partnering local and international players.

Multilateral CAF and EM investment giant Ashmore have teamed up for one fund, while regional investment bank Credicorp Capital and insurance company Sura announced a second fund earlier in the year. 

Finally, there is structural innovation in the form of the first two project bonds for roads in Colombia. Both Pacifico Tres and Concesión Costera sold local bond market peso bonds and cross-border dollar bonds this year.

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