Financing has closed on another roadway project within Colombia’s enormous 4G infrastructure program, with an investment of 1.68 trillion pesos, or more than $650 million USD at the current exchange rate.
The financing comes from companies including BlackRock, Bancolombia, and BBVA in addition to the Inter-American Development Bank (IDB), Fondo Unión Para la Infraestructura (UPLI), and federal governmental agency Financiera de Desarrollo Nacional (FDN).
Called the Ruta de Cacao project, the 189-kilometer (117-mile) road will connect the cities of Bucaramanga in Santander and Yondó in the Middle Magdalena region of Antioquia, passing through Barrancabermeja, a small but important city that is the location of one of the two key refineries used by state-controlled oil company Ecopetrol.
The project is fully funded in pesos, a provision the government prefers in all major infrastructure works to avoid the currency exchange risk present in long-term building projects based in dollars.
State financial development agency FDN will be putting up roughly a third (32.3%) of the total sum, directly and indirectly, through an investment of 281 billion pesos, a liquidity line of 105 billion pesos, and a credit facility involving the IDB for another 261 billion pesos.
This is now the 14th project to receive funding within the 4G program and the first to close financing since President Iván Duque took office in August. This also represents BBVA’s first participation in a 4G project.
“This closure, which is the first under the new government, shows the confidence and optimism that exists about the future of the country,” said Clemente del Valle, president of the FDN.
Launched under the administration of former President Juan Manuel Santo, 4G is a mega-project program seeking to overhaul Colombia’s entire roadway system over the course of the next decade. It has already received funding from banks and organizations all across the world, including multiple Wall Street banks, and is expected to include tens of billions of dollars in investments by the time it concludes.
Some 21 trillion pesos have been invested so far, and the Duque government expects two more closings this year, bringing that total north of 24 trillion pesos.