Colombia wants more international financing for 4G highways

Colombia is trying to convince more foreign lenders to participate in the financing of the country's fourth generation (4G) highways program.

The head of financial development institution FDN, Clemente del Valle, told local newspaper Dinero that the biggest challenge now for the ambitious initiative is to secure financing for a total of 23 projects.

"The fundamental challenge is to expand, and to keep expanding, the base of [financial] players," del Valle said. International banks have expressed great interest in the projects, but the fact that they are financed in Colombian pesos has kept many potential lenders away, he pointed out.

To address this problem, the FDN recently opened a financing line in pesos for international financial entities, del Valle said.

The official added that FDN is also working on new credit structures to facilitate investments from abroad.

Three foreign fund managers are currently involved in the 4G program, including BlackRock from the US, and del Valle said he expects a fourth fund manager to join by the end of the year.

Del Valle admitted that the massive scandal involving Brazilian construction and engineering group Odebrecht has caused some concern among local banks. Congress is therefore debating a bill to create a mechanism that will provide better transparency to the rights and obligations when a concession contract is cancelled, such as section 2 of the Ruta del Sol highway.

According to a press release from Colombia's infrastructure agency ANI, 100bn pesos (US$33mn) have so far been paid to workers and suppliers who were involved with the before mentioned contract, which was cancelled following bribe allegations against Odebrecht.

"We have seen high confidence from international banks in these projects and we hope that this confidence can be transmitted to the local banks," del Valle said.