Santiago metro betting on new financing sources for US$9bn expansion plan

Chilean subway operator Metro de Santiago is betting on new financing sources to support its US$9bn expansion plan, although passenger traffic is still at only 90% of pre-pandemic levels, according to the firm’s chairman, Guillermo Muñoz. 

“It’s not enough. We would like to have even more demand, but that has allowed us to have certain slack that, alongside the support of the treasury which is our owner, will allow us to keep developing expansion projects in a sustainable manner, and accessing non-traditional financing mechanisms,” Muñoz told BNamericas after the launch of a fare card marking the subway’s 50^th anniversary. 

Metro de Santiago issued green bonds earlier this month in the Swiss market, raising 155mn francs (US$183mn) at a rate of 1.6925%, with a 2031 repayment date. 

Muñoz said the company was very satisfied with the operation and that US$4bn for the expansion plan is expected to come from similar mechanisms in both the local and international markets. 

“We hope that this process will help us fund the network expansion in a more sustainable and economic manner,” he said, highlighting that the operation was the first of its kind for a public Chilean company in the Swiss market. 

During the presentation, Muñoz said the future line N°9 (US$1.95bn) is expected to obtain environmental approval during the first half of 2025 and construction would start shortly after.

Line N°8 (US$1.9bn) would follow suit with its environmental approval expected during the second half of 2025 or early 2026.

The subway operator is also building line N°7 (US$2.53bn), which is expected to start operations in 2028, as well as extending line N°6 (US$197mn), which is due to be ready late 2027.