Colombia’s government told its Pacific Alliance partners this week that it will send Congress the bloc’s free-trade agreement with Singapore, a step meant to bring Bogotá into line with Chile and Peru, where the pact has been in force since May 2025.

The pledge came at the first meeting of the Alliance’s High-Level Group hosted by Mexico since it took over the bloc’s rotating presidency from Colombia earlier this year. The Grupo de Alto Nivel (High-Level Group, or GAN) — the vice ministers of foreign trade and foreign relations from Chile, Colombia, Mexico and Peru — met August 20 and 21, 2026, in Mexico City, in a session that photos released by the Alliance place inside Mexico’s Secretaría de Economía (Ministry of Economy).

Colombia’s vice minister of foreign trade, Sandra Carvajal Sáenz, told her counterparts that President Abelardo de la Espriella’s government would submit the Pacific Alliance-Singapore agreement to Congress for the legislative and Constitutional Court review that Colombian treaties require before they can take effect. Singapore, Chile and Peru completed those procedures and put the deal into force on May 3, 2025, three years after it was signed at a Pacific Alliance presidential summit in Colombia; Mexico and Colombia are the two Alliance members that have yet to ratify it.

The High-Level Group’s agenda covered four areas. On regional value chains and regulatory cooperation, the vice ministers looked for ways to integrate production across the four countries and cut the regulatory barriers that keep exporters from adding value before selling into outside markets. On public-private coordination, they discussed concrete steps to link the bloc’s technical working groups with governments and with the private-sector Consejo Empresarial de la Alianza del Pacífico (Pacific Alliance Business Council, or CEAP). On small and medium-sized enterprises, the goal is turning those businesses into a bigger driver of the bloc’s trade and growth. And on trade promotion, the vice ministers discussed how the four countries’ promotion agencies affect trade, investment and tourism, and agreed those agencies need to be a governmental priority. Carvajal told her counterparts Colombia was “fully willing to work hard, constructively and decisively with our Pacific Alliance partners to actively contribute to this integration mechanism having an increasingly tangible impact on our economies and, above all, on generating jobs and opportunities for our citizens.”

The vice ministers’ meeting followed a forum the CEAP held on attracting foreign investment to the bloc’s four economies. Speaking on behalf of Commerce, Industry and Tourism Minister Mauricio Gómez Amín, Carvajal said legal and regulatory stability — along with tools such as free-trade zones and trade-facilitation mechanisms — are priorities for the ministry. Gómez Amín made the same point in an August 10 statement from the ministry announcing his appointment: “Colombia needs clear rules, legal certainty and a government that sees business as an ally, not an adversary,” he said. “We are working to unblock projects and bring domestic and foreign capital into infrastructure, logistics, energy, connectivity, agribusiness, tourism and exportable services.”

Carvajal is one of two vice ministers Gómez Amín swore in on August 14, 2026, alongside Manuel Alejandro Naranjo Giraldo as vice minister of business development, El Heraldo reported. She joined the ministry after 17 years at ProColombia and, most recently, as the Caribbean regional manager for the exporters’ association Analdex. Gómez Amín, a Barranquilla lawyer and former senator, took over the ministry after de la Espriella’s government was sworn in this year, El Tiempo reported.

Mexico assumed the Pacific Alliance’s rotating presidency from Colombia on January 30, 2026, after Colombia closed out its own term with the signing of the Bogotá Act. The bloc, created in 2012 by the presidents of Chile, Colombia, Mexico and Peru to pursue free movement of goods, services, capital and people among its members, is also working through Costa Rica’s bid to join, a process that began when Alliance ministers accepted San José’s candidacy in December 2024, under Chile’s presidency, and has continued through working-group sessions on framework-agreement compliance and trade-protocol negotiations since.

Carvajal used the Mexico City trip to also hold separate bilateral meetings with counterparts from Costa Rica, Mexico, Chile and Peru, the ministry said.

Headline photo: Vice ministers of foreign trade and foreign relations from Chile, Colombia, Mexico and Peru meet as the Pacific Alliance’s High-Level Group at Mexico’s Secretaría de Economía in Mexico City, August 21, 2026. (Photo courtesy Pacific Alliance)

A magnitude 7.4 earthquake struck western Colombia at 7:34 a.m. local time on August 10, with an epicenter about 3 miles (5 kilometers) east of San José del Palmar in the department of Chocó, roughly 150 miles (241 kilometers) from Bogotá, according to the US Geological Survey and Colombia’s Servicio Geológico Colombiano (Colombian Geological Survey). The quake originated at a depth of more than 100 kilometers, classifying it as a deep intraslab event tied to the Nazca Plate’s subduction beneath the South American Plate. Tremors were felt as far away as Panama, Venezuela, Ecuador, and Peru.

As of August 12, Colombian authorities had confirmed more than 188 deaths, over 1,600 injuries, 222 people missing, and 260 people still trapped in debris, according to the Unidad Nacional de Gestión del Riesgo de Desastres (National Disaster Risk Management Unit, UNGRD) and figures reported by El Tiempo; earlier tallies from the UN Office for the Coordination of Humanitarian Affairs (OCHA) put damaged homes at close to 5,000, with 61 buildings collapsed and more than 550 schools and 24 health facilities affected across roughly 16 departments. Chocó, Valle del Cauca, Caldas, Risaralda, and Quindío sustained the heaviest damage. President Abelardo De La Espriella declared a national disaster, invoked an economic emergency, and decreed three days of national mourning.

Colombia’s Foreign Ministry, the Cancillería, installed an international cooperation command post led by Foreign Minister Omar Bula to field and coordinate offers of assistance from foreign governments and multilateral organizations. Vice President José Manuel Restrepo said more than 12 countries had formally pledged humanitarian aid or rescue personnel, and that multilateral institutions alone had presented cooperation proposals totaling $1.3 billion USD in assistance of various kinds. “We have already received proposals worth $1.3 billion USD in cooperation of various kinds from multilateral organizations in the midst of this tragedy,” Restrepo said.

“We have already received proposals worth $1.3 billion USD in cooperation of various kinds from multilateral organizations in the midst of this tragedy.” — José Manuel Restrepo, Vice President of Colombia

United States

The US Department of State said it mobilized an initial $15.5 million USD in emergency shelter, food, and protection assistance, along with post-earthquake structural assessments, according to an August 11 media note from the department’s Office of the Spokesperson. The funding is being channeled through five partner organizations: Catholic Relief Services (CRS), the International Organization for Migration (IOM), Miyamoto International, the UN World Food Programme, and World Vision. Of the total, $3 million USD routed through CRS draws on funding already committed under a separate, previously announced global assistance award to that organization, meaning it does not represent new incremental spending beyond what State had already budgeted for CRS programming.

The department also activated a Disaster Assistance Response Team (DART), a standing mechanism of humanitarian specialists drawn from across the State Department, with members arriving in Colombia the day of the earthquake to coordinate needs assessments and the broader US government response alongside embassy personnel in Bogotá.

Separately from the new $15.5 million USD package, the State Department noted that as part of its existing $3.8 billion USD contribution to OCHA, the United States had previously provided $200 million USD to the Colombia Pooled Fund, a standing mechanism OCHA can draw on for earthquake-related needs as well as humanitarian programming in Colombia that predates the earthquake. That $200 million USD figure reflects prior funding availability rather than a new pledge tied specifically to the August 10 disaster.

On consular matters, the US Embassy in Bogotá remained open and continued providing emergency and routine passport, notarial, and consular services; its consular agency in Barranquilla also remained open. The embassy advised American citizens in Colombia to enroll in the Smart Traveler Enrollment Program (STEP) at step.state.gov and to follow [@USEmbassyBogota](profile/USEmbassyBogota) and [@TravelGov](profile/TravelGov) on social media for security updates. US citizens seeking assistance can reach the Bureau of Consular Affairs at 888-407-4747 from within the United States, or +1-202-501-4444 from other locations.

Multilateral development banks

The World Bank disposed $200,000 USD in a non-reimbursable grant, without an associated credit line, to fund post-earthquake damage assessments. Susana Cordeiro Guerra, the World Bank’s vice president for Latin America and the Caribbean, offered technical expertise drawn from the institution’s experience responding to disasters elsewhere, in addition to the grant.

The Inter-American Development Bank (IDB) approved $500,000 USD in non-reimbursable technical cooperation funding, of which $350,000 USD was made immediately available to the Colombian Red Cross and $150,000 USD earmarked for technical support, Restrepo said. Separately, IDB Group President Ilan Goldfajn said the institution has up to $300 million USD in contingent emergency financing available to Colombia should the government request it; wire reports including CNBC and CBC cited a related figure of $50 million USD as immediately available for reconstruction support, reflecting different tranches or reporting of the same contingent facility.

CAF, the Banco de Desarrollo de América Latina y el Caribe (Development Bank of Latin America and the Caribbean), pledged $500,000 USD in humanitarian donations to be channeled through its Social and Human Development Funds, CAF executive president Sergio Díaz-Granados said.

European Union

European Commission President Ursula von der Leyen announced €2.1 million EUR in humanitarian funding for health, water, sanitation and hygiene, shelter, food, protection, and cash assistance in the hardest-hit areas, according to the European Civil Protection and Humanitarian Aid Operations department (ECHO). The European Union activated its Civil Protection Mechanism, which pools resources among the bloc’s 27 member states, and deployed its Copernicus satellite mapping service to support damage assessment. A further €100,000 EUR was reallocated from an existing EU-funded project implemented by the German Red Cross to meet immediate needs of roughly 2,500 families in Chocó and Valle del Cauca.

Switzerland

The Swiss government approved 1 million CHF (about $1.23 million USD) in aid, with half directed to the UN World Food Programme and local nongovernmental organizations for emergency assistance and the remainder allocated to restoring living conditions in destroyed areas, according to the Swiss Agency for Development and Cooperation. Swiss President Guy Parmelin offered solidarity with Colombia the day of the earthquake.

Spain

Spain’s Agencia Española de Cooperación Internacional para el Desarrollo (Spanish Agency for International Cooperation for Development, AECID) mobilized an initial €1 million EUR package covering shelter materials, water and sanitation kits, medication, and support for deployed health personnel, Foreign Minister José Manuel Albares said. Spain’s Ministry of Foreign Affairs reported no confirmed Spanish fatalities as of August 12, though it had not yet located 75 Spanish nationals believed to have been in the affected region.

El Salvador

El Salvador’s president, Nayib Bukele, dispatched two aircraft carrying 100 tons of humanitarian aid along with medical and rescue teams, according to the Presidencia de la República de El Salvador (Presidency of the Republic of El Salvador).

Ecuador

Ecuador’s Ministerio de Relaciones Exteriores y Movilidad Humana (Ministry of Foreign Affairs and Human Mobility) sent 47 rescuers with canine units and equipment provisioned for seven days of operations.

Mexico

Mexico deployed 255 specialized military search-and-rescue personnel, including canine handlers and medical staff, along with 4 tons of medications, 8.4 tons of food, satellite phones, radios, generators, and tents, according to Mexico’s Secretaría de Relaciones Exteriores (Ministry of Foreign Affairs).

Peru

Peru sent a plane carrying 12.5 tons of supplies and 62 rescuers through its Ministerio de Relaciones Exteriores (Ministry of Foreign Affairs).

Chile

Chilean President José Antonio Kast offered his government’s civil and technical resources through Chile’s Ministerio de Relaciones Exteriores (Ministry of Foreign Affairs), without publicly specifying the scope.

Venezuela

Venezuela’s government, through Vice President and Foreign Minister Delcy Rodríguez and the Ministerio del Poder Popular para Relaciones Exteriores (Ministry of People’s Power for Foreign Affairs), said it would send rescue brigades, an announcement that drew domestic criticism within Colombia given the state of bilateral relations.

Brazil

Brazilian President Luiz Inácio Lula da Silva pledged solidarity and said logistical and technical teams were on standby through Brazil’s Ministério das Relações Exteriores (Ministry of Foreign Affairs).

Argentina

Argentina’s Ministerio de Relaciones Exteriores, Comercio Internacional y Culto (Ministry of Foreign Affairs, International Trade and Worship) offered material assistance, civil protection assets, and logistics support.

Additional Latin American and Caribbean support

Several other countries in the region conveyed solidarity or more limited offers of support:

• Panama — President José Raúl Mulino offered collaboration “within our capacity” through the Ministerio de Relaciones Exteriores de Panamá (Ministry of Foreign Affairs of Panama).
• Costa Rica — The government conveyed solidarity through its Ministerio de Relaciones Exteriores y Culto (Ministry of Foreign Affairs and Worship).
• Dominican Republic — President Luis Abinader said his country stood ready to provide assistance, coordinated through the Ministerio de Relaciones Exteriores de República Dominicana (Ministry of Foreign Affairs of the Dominican Republic).
• Guatemala — The disaster-response agency, the Coordinadora Nacional para la Reducción de Desastres (National Coordinator for Disaster Reduction, Conred), remained in contact with Colombian counterparts to determine whether a formal request for assistance would follow, President Bernardo Arévalo de León’s government said.
• Cuba — Expressed willingness to help without publicly detailing specific commitments.
• Bolivia — Expressed willingness to help without publicly detailing specific commitments.

Other countries

Vice President Restrepo named Japan, Sweden, and Turkey among the more than 12 governments that formally offered humanitarian aid or rescue support, though itemized figures for their pledges were not publicly available as of this writing. Israel, France, Germany, Italy, and Ukraine also expressed readiness to coordinate assistance, according to Colombian media reporting, without confirmed dollar figures attached to those offers.

Red Cross and Red Crescent movement

The International Federation of Red Cross and Red Crescent Societies (IFRC) launched an emergency appeal for 11.7 million CHF to support the Colombian Red Cross, which activated its National Crisis Room and deployed a 30-member urban search-and-rescue team from its Antioquia branch to Chocó, alongside volunteers from its Quindío and Caldas branches. The Colombian Red Cross also activated its Restoring Family Links service to help reunite people separated from missing relatives.

Private sector

Among corporate contributions, Spanish bank BBVA (BME: BBVA) (NYSE: BBVA) said it would provide 3,500 food and hygiene kits, including nonperishable staples and personal care items, distributed through Colombia’s regional food bank network.

How to contribute

Colombian donors and members of the international community seeking a vetted local channel for contributions can direct support through somosone.com.co, the Colombian strategic-philanthropy platform operated by ONE Inversión Social. The organization has partnered with Sankofa Danzafro, La Pascasia, and Presentes Corporación on a Chocó-focused relief campaign, with a donation page linked from the platform’s homepage.

The agreement, initially announced on January 6, 2025, provided Scotiabank with an approximate 20% ownership stake in the newly formed holding company, Davivienda Group, in exchange for the transferred operations. The combined operations of both institutions will be managed under the Davivienda Group umbrella.

Scott Thomson, President and CEO of Scotiabank, commented that the completion of the transfer supports the bank’s International Banking strategy, citing the achievement of operational scale across its regional markets and projected improvements in profitability. Thomson also noted that the equity stake provides Scotiabank with exposure to a combined business positioned for scale, potential synergies, and an expanded client base under a single management team.

Javier Suárez, CEO of Davivienda Group, stated that the transaction integrates complementary capabilities and expertise, positioning the group to expand business development opportunities and scale operations by leveraging Scotiabank’s global experience with Davivienda’s regional expertise across Colombia and Central America.

The integration plan dictates that the former Scotiabank operations in Colombia and Costa Rica will operate under a transitional brand, DAVIbank. In Panama, the businesses will fully transition to the Davivienda brand.

Scotiabank and Davivienda are expected to collaborate to strengthen their combined global reach. This cooperation is designed to allow Davivienda to expand its international product offerings as a regional player, while enabling Scotiabank to continue supporting its Corporate, Wealth, and Global Banking and Markets clients throughout Davivienda’s operational footprint.

Financial and Regulatory Impact

Scotiabank forecasts recording an after-tax loss of approximately $300,000,000 CAD in the first quarter of 2026 within its Other segment. This loss is primarily related to the release of cumulative foreign currency translation losses, net of hedges.

For accounting purposes, Scotiabank’s investment in Davivienda will be recorded as an investment in associate. The company anticipates an approximate 10 basis points benefit to its Common Equity Tier 1 (CET1) ratio for Q1 2026, primarily resulting from the reduction in risk-weighted assets net of the Davivienda investment.

The approvals were received from the financial regulatory bodies in the respective jurisdictions, including the Superintendencia Financiera de Colombia (Superfinanciera), the Superintendencia General de Entidades Financieras (SUGEF) of Costa Rica, and the Superintendencia de Bancos de Panamá (SBP). Following the closure of the transaction, the combined operations of both institutions will function under a new holding company, Davivienda Group (BVC: PFDAVIGRP).

The transfer formalizes an agreement initially disclosed by Scotiabank on January 6, 2025. Under the terms, Scotiabank transfers its banking operations in the three Central and South American nations in exchange for an approximate 20% ownership stake in the resulting Davivienda Group on a pro forma basis.

Following the closure of the transaction, the combined operations of both institutions will function under a new holding company, Davivienda Group (BVC: PFDAVIGRP).

The consolidation is structured to achieve greater operational scale for Davivienda across all three markets. Furthermore, as part of the transaction, Mercantil Colpatria is scheduled to sell its residual interest in Scotiabank Colpatria, its joint venture with Scotiabank in Colombia.

For Scotiabank, the divestiture aligns with its five-year strategy focused on enhancing profitability across its international banking portfolio by streamlining operations in non-core markets. The company stated the transaction reduces operational complexity and helps strengthen its capital focus on its primary growth corridor across North America and select Latin American markets. The sale is considered capital neutral overall, with the potential to contribute to future earnings.

The agreement also stipulates that Scotiabank will receive a combination of newly issued common and preferred shares in the new entity, commensurate with its ownership stake. Scotiabank will also retain the right to designate individual(s) to serve on the Board of Directors of the Davivienda Group’s combined operations.

The two institutions intend to establish a mutual referral agreement to ensure Scotiabank can maintain support for its Corporate, Wealth, and Global Banking and Markets clients across the expanded Davivienda service footprint.

Financial Impact and Accounting

The initial announcement in January 2025 indicated that Scotiabank’s operations subject to the transfer would be classified as assets held for sale for accounting purposes. This classification necessitated the recognition of an after-tax impairment loss of approximately $1.4 billion CAD in the first quarter of 2025. The impairment was projected to reduce Scotiabank’s Common Equity Tier 1 (CET1) ratio by an estimated 10 to 15 basis points.

The company further disclosed that an estimated $300 million CAD in additional losses will be recorded upon closing, primarily related to cumulative foreign currency translation losses.

Upon the transaction’s completion, Scotiabank’s 20% equity stake in Davivienda Group will be recorded as an investment in associate. The reduction in risk-weighted assets from the transfer is expected to result in a commensurate benefit to the CET1 ratio, estimated at approximately 10 to 15 basis points.

Davivienda Group, which originated as Corporación de Ahorro y Vivienda in Colombia in 1972, is a regional banking entity serving roughly 25.6 million customers through a network that includes 653 branches and more 2,807 ATMs, with established operations in Colombia, Costa Rica, El Salvador, Honduras, Panama, and the US. The institutions have stated they will collaborate to facilitate a smooth transition for clients and employees in Colombia, Costa Rica, and Panama.

In a written statement, Trump said:

“In Colombia, coca cultivation and cocaine production have surged to all-time records under President Gustavo Petro, and his failed attempts to seek accommodations with narco-terrorist groups only exacerbated the crisis.  Under President Petro’s leadership, coca cultivation and cocaine production have reached record highs while Colombia’s government failed to meet even its own vastly reduced coca eradication goals, undermining years of mutually beneficial cooperation between our two countries against narco-terrorists.  For this reason, I have designated Colombia as having failed demonstrably to meet its drug control obligations. Colombia’s security institutions and municipal authorities continue to show skill and courage in confronting terrorist and criminal groups, and the United States values the service and sacrifice of their dedicated public servants across all levels of government.  The failure of Colombia to meet its drug control obligations over the past year rests solely with its political leadership.  I will consider changing this designation if Colombia’s government takes more aggressive action to eradicate coca and reduce cocaine production and trafficking, as well as hold those producing, trafficking, and benefiting from the production of cocaine responsible, including through improved cooperation with the United States to bring the leaders of Colombian criminal organizations to justice.”

The US State Department on social media directly blamed Gustavo Petro for the failures, but also noted that the US government issued a 1-year waiver, meaning bilateral cooperation, and almost half a billion USD in security and antinarcotics aid to Colombia will not end immediately. One year from now, Colombia will have a new president, as Petro’s term comes to an end August 7^th, 2026.

The decertification puts half a billion dollars of US security aid to Colombia at risk. Mafia & insurgent groups have flourished during the government of Gustavo Petro.

“Under Petro’s misguided leadership, coca cultivation & cocaine production in Colombia has increased to historic levels…President Trump “has determined that the Colombian government failed to uphold its drug control obligations, but he has issued a waiver so critical US cooperation, including on counter-narcotics, can continue. Results matter – we must see progress and it must be soon!” the State Department tweeted.

Colombian President Gustavo Petro ran on a presidential campaign promising “total peace” and pledging programs that would replace coca production with other food crops, increasing Colombia’s agricultural exports. What has happened, however, is the reverse. Narco-insurgent groups such as FARC dissident mafias, communist rebels ELN, and the Clan del Golfo (Gulf Clan) mafia are all resurgent and taking over territory from government control. Over the weekend, narco-insurgents bombed an electrical tower in Medellin, and this just a few weeks after a massive truck bomb killed over 19 in Cali, Colombia’s third largest city. Under the Petro administration, cocaine production has surpassed levels seen during the days of the cartels and Pablo Escobar.

Petro, a former member of the M-19 guerilla group himself, has made statements defending cocaine, calling it “no worse than whisky,” and in April, his own former foreign minister Alvaro Leyva publicly accused him of being a drug addict.

“It was in Paris where I was able to confirm that you had a problem with drug addiction. But what could I do? Surely, I was not up to the task. I should have reached out, helped, intervened. I carry the regret of not having tried to lend a hand. The truth is, you never recovered. That is the reality,” said Leyva.

A defiant Gustavo Petro refused to accept any responsibility and said that the Trump administration’s decision demonstrates that US policy has failed.

Petro’s own Interior Minister, Armando Benedetti, is an admitted recovering drug addict.

Last night, a defiant Petro blamed the US and defended his administration’s efforts, saying that the move would end Colombia’s dependence on the United States, and cited the government’s recent cocaine seizures, without mentioning the skyrocketing production during his Council of Ministers meeting.

“You begin with a factual lie. Coca crop growth has occurred during (Iván) Duque’s administration, and with forced fumigation. It is U.S. policy that has failed. To reduce coca leaf cultivation, what is needed is not glyphosate dropped from airplanes, but a decrease in demand for cocaine, primarily from the U.S. and Europe,” said Petro in response to the US State Department statement.

Former Colombian President Ernesto Samper, whose administration also experienced decertification, and whose 1994 campaign was partially financed by the Cali Cartel drug lords, assured that decertification was “not the end of the world.” The former president added that “we must once again demand that consumer countries like the United States and many in Europe fulfill their commitment to reducing drug demand, precisely at a time when consumption of plant-based drugs has declined and the devastating effects of synthetic drugs like fentanyl and other narcotics we don’t produce are being felt.”

Samper stated that the decision to decertify Colombia in its fight against drugs “is illegal, political, and regressive.” He explained that it is “illegal because no country is authorized to impose unilateral sanctions on another country or its nationals. Only the United Nations can do so under established circumstances and in justified cases of necessity,” and it is political “because it has always been used to punish countries considered “enemies” of the United States. The worst right-wing dictatorships have benefited from the non-application of decertification, while our country, which has paid high human and institutional costs, is decertified every time the Colombian government appears as an “enemy” of the United States government.”

Paisa politicians blame Petro

Not all Colombian politicians are defending Petro. Medellín’s mayor Federico “Fico” Gutierrez, who returned from the US on his own diplomatic missive to meet with US officials  in direct defiance of Petro’s orders not to go, issued a statement damning the Colombian President:

“Colombia is being decertified by the United States in the fight against drugs. It was to be expected. Petro sided with the worst criminals. They are the only ones who have won under this disastrous government. During our visit to Washington last week, our position was to ask that Colombia not be decertified. And if it were to happen, we asked that support for our public forces in the fight against drug trafficking not be withheld, nor that the trade on which millions of jobs depend in Medellín and throughout Colombia be affected. Indeed, our agenda in Washington was successful in defending Colombia. Although Colombia is decertified, it leaves the door open for support for our public forces and expressly highlights the recognition that the United States gives to our public forces and mayors: *“Colombia’s security institutions and municipal authorities continue to demonstrate skill and courage in confronting terrorist and criminal groups, and the United States values ​​the service and sacrifice of its dedicated public servants at all levels of government.”* (see photo) In the midst of all this, we would have solutions as a country. But seeing Petro’s absurd statements, his intention is for Colombia to lose this opportunity and for us to be plunged into chaos. It is very evident that this is what he wants and has sought all along: to be left alone and remain in power. All the more reason we remain steadfast in the defense of Colombia and our people. We pull Colombia forward from the regions.” (below video)

Colombia es descertificada por Estados Unidos en la lucha contra las drogas. Era de esperarse. Petro se puso fue del lado de los peores criminales. Son los únicos que han ganado con este nefasto gobierno.
En nuestra visita a Washington de la semana pasada, nuestra posición fue… pic.twitter.com/2qEIBTpTGU

— Fico Gutiérrez (@FicoGutierrez) September 16, 2025

The Governor of Antioquia, Andrés Julián Rendón, also had a scathing rebuke for his own president. Antioquia is the Colombian department where Medellín is capital and is home to much of Colombia’s economic activity. Rendón tweeted:

“Regarding the decertification of Colombia, the Government of @petrogustavo – It’s a snapshot of the failure of “total peace,” of temporizing with criminals, of dealing with them in a friendly way while they destroy the country and Colombians. – Now, the Petro government should stop playing the victim coming up with resentful, outdated, anti-US rhetoric. The President is reaping his own harvest of incompetence and failure: he sided with the criminals. The world and the US are paying him back. – Antioquia is the first victim: flooded in a sea of ​​cocaine by a weak government that ties up soldiers and police to prevent action. The criminals win, and we Antioqueños lose. Drugs, drugs, and more drugs to poison our youth and to enrich and strengthen the criminals. – Aerial spraying was the most successful tool in the past: effective in eradication, it protected our soldiers and police. It must be reactivated. Tomorrow will be too late! It’s been proven: more cocaine seizures are not proof of greater effectiveness in the fight against drug trafficking; rather, they are the ultimate proof of a historic peak in production. We’ve gone back more than 20 years, but fortunately, this government has only months left. In Antioquia, despite intimidation and judicial persecution, we will continue working to defend the interests of my fellow citizens, adhering to the Constitution and appealing to the courage of soldiers and police. In our government, we understand peace as the rule of law, security, justice, and social opportunity. We will remain there, even if our lives and freedom are at risk.

Sobre la decertificación a Colombia, al Gobierno de @petrogustavo:

– Es una radiografía del fracaso de la paz total, de contemporizar con criminales, de tratarlos por las buenas mientras acaban con el país y los colombianos.

– Ahora que el Gobierno Petro no se haga la víctima… pic.twitter.com/OygRV29NER

— Andrés Julián (@AndresJRendonC) September 16, 2025

Business calls for cooler heads to prevail

Amcham Colombia, the binational Colombian-American chamber of commerce based in Bogotá and made up of both Colombian and US businesses involved in bilateral trade, issued a statement lamenting the decision, while also calling for the Colombian President to do more to save the relationship.

“AmCham Colombia firmly and respectfully calls on the National Government to urgently present and implement a roadmap with achievable and verifiable goals that demonstrate political will and substantial improvements in crop eradication, production and trafficking reduction, judicial cooperation, and the financial dismantling of criminal organizations. Only then can the country request reconsideration of the designation in the next cycle and maintain assistance within the national interest of the United States.

Respectfully, AmCham Colombia invites the United States Government to recognize the progress in interdiction and seizures and to consider announcing the resumption of spraying when appropriate and under the safeguards of the Constitutional Court, complemented by alternative development and a comprehensive state presence. These signals should contribute to avoiding measures that affect trade, tourism, and investment between the two countries.”

🇺🇲🇨🇴 #Descertificación con interés nacional@AmChamCol hace un llamado firme y respetuoso al Gobierno Nacional para presentar y ejecutar con urgencia una hoja de ruta con metas alcanzables y verificables que evidencie voluntad política y una mejora sustancial en: erradicación… pic.twitter.com/qDer8SKYFl

— Maria Claudia Lacouture (@mclacouture) September 16, 2025

Above image: Gustavo Petro during his council of ministers meeting where he defended his administration and blamed Trump for his country’s decertification. Photo credit: Ovidio González – Presidencyof The Republic

Doris Chingate, project manager of Agroexpo, highlighted that “This fair not only exceeded attendance expectations, but also confirmed that the heart of Colombian agriculture beats stronger than ever. Behind this historic fair, hundreds of hands made it possible: the logistics team, the producers, ranchers, entrepreneurs, engineers, technicians, veterinarians, designers, assemblers, commercial team, communications, service personnel, registration, security, box office, and all the collaborators of Corferias and allied unions. Each one left their soul so that the countryside would shine in the city. Today, more than 290,000 visitors can say that they lived an unforgettable Agroexpo.”

The Agroexpo 2025 Business Roundtable closed with more than 600 appointments between 214 exhibitors and 44 buyers from Latin America and the Caribbean. Photo credit: Agroexpo.

According to Daniel Espinosa, president of UNAGA, “Agroexpo 2025 has been an unprecedented celebration. This edition consolidates our fair as the most important meeting point between producers, entrepreneurs, guilds, and rural families from all over the country. Seeing thousands of people touring the pavilions, connecting with the land, learning, and dreaming of a stronger and modern future, is proof of the commitment we have to rural development. From the 27 livestock associations that belong to UNAGA, we celebrate the effort of all those who made it possible and reaffirm our pride in representing the productive heart of Colombia.”

A successful business roundtable

The Agroexpo 2025 Business Roundtable was also a resounding success, with total expected revenues exceeding $4.1 million USD (more than $16.700 million COP at the value of the current TRM). During July 15 and 16, more than 600 appointments were held between 214 exhibitors and 44 international buyers from 10 countries, including Argentina, Bolivia, Colombia, Costa Rica, Curacao, Ecuador, Panama, Peru, Dominican Republic, and Venezuela.

During the event, spot deals were made for $1.4 million USD, and commercial agreements for $2.78 million USD were projected to be carried out in the next 12 months. This balance demonstrates the export potential of Colombian agriculture and Agroexpo’s ability to promote the countryside with international markets.

A protected and guarded fair that takes care of each animal

Carlos Augusto Ríos Martínez, Cundinamarca sectional manager of the Colombian Agricultural Institute (ICA), highlighted, “As responsible for the country’s agricultural health, the ICA has had a decisive participation in Agroexpo 2025, as it does every year, guaranteeing the inspection, surveillance, and control of the entry and stay of animals and plants. At the close of the fair, we can give a piece of peace of mind: there was no risk situation.”

Ríos underscored the effort of the technical and veterinary team that operated in shifts from July 6 to 21, and stressed that a fair with the volume of entry and exit of animals, such as Agroexpo, requires intense logistical work.

He also highlighted the work of the team for the issuance of mobilization and plant health guides, especially in controls such as the prevention of the entry of restricted products, such as non-certified potatoes, due to diseases such as purple tip. “We still have lessons learned, but the balance is highly positive. From now on, we are working with the organizers to strengthen processes towards the next edition.”

Agroexpo 2025. Photo credit: Agroexpo.

On the other hand, the District Institute for Animal Protection and Welfare – IDPYBA carried out inspections throughout the fair to verify how the five fundamental freedoms of the animals present at Agroexpo 2025 were guaranteed.

These inspections focused on validating that all specimens were:

• Free of hunger and thirst;
• Free of discomfort;
• Free from pain, injury, or disease;
• Free to express natural behavior; and
• Free from fear and anguish. This rigorous monitoring was key to ensuring a dignified and respectful stay with animal welfare throughout the fair.

Auctions by Asocebú, UNAGA, and Fedegán

In total, the four auctions held during Agroexpo 2025 reached sales of $2.479 million COP, with a total of 163 lots offered. “These auctions reaffirm the solidity and projection of the Colombian livestock business, as well as the genetic quality of the specimens presented,” said Espinosa. They were carried out as follows:

Asocebú began on July 11, 2025, with “La Gran Reserva”, an auction where 50 lots were offered, focused on pasture specimens as breeders, levante females, and belly females, with the participation of breeders from all over the country. The day closed with more than $1 billion COP in sales.

On July 12, it was the turn for the “Great Auction of Specimens of Cabezal”, with 35 lots made up of animals that had been judged during the first week of the fair, many of them awarded, and that reached sales close to $700 million.

For its part, Fedegán, located in pavilion 4 and which had more than 60 commercial allies and an academic agenda dedicated to animal health, international markets, sustainability, and promotion of consumption, advanced in its auctions with the participation of cattle ranches such as Acres Farm, Hacienda la Ponderosa, and Hacienda Cuba, reaching high sales numbers.

On July 18, the “UNAGA – TVGAN Diamond Auction” was held in the Main Auditorium of Corferias, where more than 40 lots focused on meat specimens were offered. And the day closed with $337 million in sales. On Saturday, the 19th, it was the turn of the “Remate Estrellas de Fedegan,” where 38 batches focused on milk were offered, and the day closed with $442 million in sales.

A tour in numbers through the most historic version of the fair

The 25th edition had several exhibition areas, located throughout the fairgrounds: in pavilion 8, level 2, there were about 250 sheep of different breeds: hair, milk, materna, and meat breeds. In this space, 27 associated breeders participated, 10 pens with more than 50 producers.

Compared to the four auctions carried out by ASOCEBÚ, UNAGA, and Fedegán, it reached sales close to $2.479 million USD, with a total of 163 lots offered. Photo credit: Agroexpo.

Another of the places that captured the attention of the attending public was the stalls, which received in the first week horses from countries such as Switzerland and Holland, where the breeds specialized in heavy draft took the limelight. While for the second week of the Fair, trot horses and Paso Fino were the protagonists.

One of the events with the highest influx of the public was the “Copa Colombia Agroexpo 2025”, held from July 17 to 20, in which 532 specimens participated and four gaits were judged. The winners in each category were:

Track and gallop:

• Grand Champion: Neptune of Montesa
• Grand Champion: 2M Star
• Reserved Champion: Rancho San Juanito Furor
• Reserve Champion: Perennial Victory of the Ceiba
• Young Champion: Cantador de Mis Potrillos
• Young Champion: Malagueña from Rancho La Luna
• Grand Champion: Chaotic Diamond of Salem
• Grand Champion: Mission Accomplished by Carolina de Los Mellis
• Reserved Champion: Kronos of Two Steps
• Reserved Champion: Welcome from La Cristalina
• Young Champion: Corso de Nuevo Amanecer
• Young Champion: Antioqueñita from Rancho La Milagrosa

Colombian Paso Fino:

• Grand Champion: Bandit Lover
• Grand Champion: 3C Pepper
• Reserved Champion: Ponderosa Chapala Show
• Reserved Champion: Queen of Hacienda Heisen
• Young Champion: Splendid Arizona from Villa Natalia

This was the experience of the exhibitors

Diego Villanueva, national commercial manager of Global Motors:

“Agroexpo 2025 was a great fair for us. We closed deals for approximately $700 million COP, and we managed to get many visitors, who were expecting to physically see our tractors, to check their quality and robustness. This fair allowed us to better position ourselves in the market, and we will undoubtedly participate again in the next edition.”

Juan Fernando Mejía Isaza, manager of Premex:

“Agroexpo 2025 was a total success for us. It had been years since we had participated with our stand and returning with our lines of animal nutrition and health for horses, beef and dairy farming, and pig farming was a wise decision. We made direct sales for more than 25 million pesos, but the most valuable thing was the commercial reach: more than 100 contacts between end customers, distributors, and suppliers from all over the country and abroad.”

Marco Tulio Pérez, representative of the Ministry of Agriculture of Huila:

“The balance of Agroexpo 2025 for the department of Huila is highly positive. Our entrepreneurs, who presented production lines such as coffee, cocoa, panela, fruit, and derivatives, achieved important commercial contacts, especially with markets in Bogotá. We highlight strategic alliances, such as the one reached between cocoa producers and the Mayor’s Office of Tenjo. In addition, export opportunities were created that open a new panorama for regional agriculture: 5,000 tons of cocoa to Russia and organic powdered panela destined for Spain.”

Álvaro Ernesto Palacio, executive president of Asohofrucol:

“From Asohofrucol and the National Fund for Horticultural Development, we celebrate that fruit and vegetable producers have made real sales within the framework of Agroexpo 2025. This fair not only allowed us to make visible the potential of our fruits and vegetables, but also showed that the Colombian countryside does sell, it does grow, and it does have a market. Events like this are essential to continue strengthening commercial chains, opening new marketing channels, and positioning our products on the national and international stage.”

Carlos Fernando Mayorga, general manager of Fedepanela:

During the days of the fair, we estimate that more than 18,000 people visited our stand, thanks to a constant programming, a multisensory experience, and a strategic location. We managed to consolidate key institutional alliances, make new panela ventures visible, and offer innovative content that connected with audiences of all ages. From regional gastronomic shows and tastings, to activations with allied characters and brands, we show that life tastes like panela and we leave a clear message: panela is identity, flavor, and future for Colombia.”

Agroexpo 2025 highlighted the ongoing strength and connectivity of the Colombian countryside through its focus on tradition, innovation, and rural communities. The event, held at Corferias, brought together producers, entrepreneurs, and guilds for its 25th edition, continuing a tradition spanning over 50 years. Planning for the next Agroexpo has already begun.

Photo credit: Agroexpo.

The central government fiscal deficit for 2024 came in at 6.7% of GDP, sharply underperforming Fitch’s forecast of 5.6% of GDP, mainly due to revenue shortfalls and an inability to implement offsetting spending cuts.

Fitch’s assessment of the Operating Environment (OE) for Colombian banks remains unchanged, despite the negative outlook on the sovereign rating. This outlook is mostly driven by worsening fiscal and public debt dynamics, but not necessarily reflecting weaker economic activity or any other material headwind to the banks’ operating conditions.

The banking system’s sufficient capitalization, improving profitability, and reducing loan impairment charges provide adequate resilience to withstand stress from government and external shocks. GDP growth is projected to increase to approximately 2.7% in 2025, up from 1.7% in 2024.

This portfolio review includes Colombian banks with Issuer Default Ratings (IDR) rated at the same level or above that of the sovereign. Fitch believes these ratings are more sensitive to a potential downgrade of the sovereign rating. Furthermore, the agency will not rate Colombian FIs higher than the sovereign rating, based on their current intrinsic credit profiles, except for those with highly-rated parents. Fitch has affirmed all the ratings for the Colombian banks included in this review.

The Viability Ratings (VR) were not reviewed at this time, given that these ratings do not have explicit outlooks, and also considering the affirmation of the OE score with a stable outlook. However, VRs at the ‘bb+’ level would likely be downgraded in the scenario of a potential sovereign downgrade, as Fitch rarely rates a bank’s VR higher than the respective sovereign rating.

The banks’ national ratings, as well as those of other financial institutions rated in Colombia, are not directly impacted, as these ratings reflect the relative strengths and weaknesses of each institution in a specific jurisdiction.
Rating actions have also been taken on the Colombian FI’s Central American subsidiaries, specifically in Costa Rica, Guatemala, and Panama.

Fitch Ratings building Photo credit: Shashank457.

In this interview, Loren Moss, executive editor of Finance Colombia, spoke with Esteban Carril, Managing Director for Latin America at Chazey Partners, about the company’s latest innovative offering: FlexBPO. This unique service delivery solution is designed to provide organizations with flexibility and agility in outsourcing key support functions such as Finance, Human Resources, Procurement, and IT.

With Chazey Partners’ deep expertise in guiding companies in establishing and optimizing shared services centers, particularly in the Latin American region, FlexBPO presents a novel approach to the outsourcing landscape. The conversation explores the benefits and unique aspects of FlexBPO, delving into when this model is most appropriate for organizations looking for a more adaptable and efficient outsourcing strategy.

Finance Colombia: I’m here with Esteban Carril. We’re here in Bogotá at the Four Seasons, lovely Four Seasons Casa Medina. You just had an event, and it’s interesting because I’ve known you for about 15 years, and to see how Chazey Partners has grown and evolved… However, one of the things I wanted to discuss is that you have just introduced something truly unique in the sector, called FlexBPO. Could you tell us a little bit about FlexBPO?

Esteban Carril: Well, thank you very much for the time, Loren. Yes, absolutely. I mean, given our experience, our track record in implementing captive organizations across the different countries in Latin America, we found out that there are a number of companies, especially in the US, that are looking for more flexibility when it comes to BPO. And we’re offering a kind of captive organization, but being managed by us and empowered by our intelligent automation team, including our transformational background, so this is unique in terms of the value offer, right?

Finance Colombia: Yeah, I was going to say because we have traditional BPO and then Chazey has such a track record in consulting with shared services, companies that possibly are migrating away from BPO and setting up their own shared services operation, especially in Latin America; strong, of course, here in Colombia, places like Costa Rica, Mexico, even Brazil. But this FlexBPO, it really is kind of a new concept. And when is it appropriate for an organization to explore? I don’t want to say hybrid model because hybrid already kind of has a meaning in our industry.

But when is it something that you think makes sense for a company?

Esteban Carril: There are two different types of targets, right? Some companies already have BPOs, and they are not very happy, especially when it comes to analytical work or when it comes to real-time processing or customer-facing roles. So there are several companies, especially in the US, that are not very happy with the existing performance of their BPO providers, and that’s where it becomes an opportunity to move to this FlexBPO model.

There are other companies where you see various mature GBS organizations that they already captured a lot of benefits and a lot of efficiencies, and there is an opportunity to get additional value through transformation and intelligent automation through FlexBPO. So I would probably say both, right? I mean, we have both types of companies where we’re currently targeting this service.

Finance Colombia: I think that it’s an innovative model. I know that you guys are going to have a lot of traction. But I want to shift gears a little bit as well, because Chazey has gone through a lot of growth and evolution, so if we talk more broadly, I think you guys have something like over 150 consultants now, but over 3,000 people altogether on your team. And I know that you guys went through a kind of structural change, you guys took on a strategic partner. Give us a little bit, because we haven’t had a chance to talk for a while, you know…

So maybe give us an update on what’s happening with Chazey Partners.

Esteban Carril: Absolutely, so our company was acquired back in the year 2022 by a big BPO provider called QX Global Group, and this group was looking to provide services, especially in Latin America and the Americas in general. So we’re bringing the transformation and consulting arm that most of the BPO providers currently don’t have, and at the same time, we are leveraging all their experience and practices for the BPO environment, so we can offer them through our FlexBPO model. So this is really a very interesting model, because we mix our consulting background with our BPO background from our parent company to come up with a unique offer to our clients.

“I was surprised by the English skill sets that the new generations are bringing, especially when it comes to near-shoring operations.” – Esteban Carril

Finance Colombia: Now, here at today’s event that you guys sponsored for shared services, you talked about the impact that AI is having. What are the types of challenges that you see with your clients when it comes to adopting, you know, you’ve got some name brand clients here, I don’t want to necessarily name them without permission, that’s, you know, some companies are proud of it, some companies have different reasons… But still, I remember, if you remember back five years ago with the pandemic, everybody was talking about technological debt and the ability to be agile and move from an on-premises to a remote modality, and that was kind of the big thing, and now we look at generative AI. And where are you finding the need and the ability to help your clients, and what are the pain points that they’re coming to you to help them navigate?

Esteban Carril: So there are several challenges right now, right? When we’re thinking about intelligent automation, the first challenge that comes to mind is mainly to build internal capabilities when it comes to, you know, trying to build an internal team to develop bots and maintain bots, etc., etc. So that’s number one. I think there’s a unique requirement in trying to build the capability internally within the companies.

Number two is when it comes to master data management. Most of the companies, they don’t have the right data to scale intelligent automation, artificial intelligence, so I think one of the key challenges that the companies have right now is mainly trying to clean their data, to set up some clear governance models, and trying to have the clean data so they can explore, empower, and scale the artificial intelligence functionalities.

So I mean, I would probably think that GBS is kind of very well positioned to, you know, to drive these initiatives, not only because they have the right skill sets when it comes to talent availability, problem resolution, data analytics; but also when it comes to the number of volume transactions that are coming through the GBS operations. So right now, if you combine intelligent automation and processes, you can really start enhancing your client experience by making sure that you can provide predictive analytics, provide proactive recommendations to internal clients.

Finance Colombia: Great, and I’ll let you go pretty soon. You’ve been generous with your time. I think we both have planes to catch, but last question. You guys have a presence, I know, in over 20 countries. Here in Latin America, you guys are extremely strong. You run the Latin American operations. You guys selected Bogotá, Colombia, for this FlexBPO concept. Of all the places you could have chosen, a lot of places are powerhouses and shared services, and BPO. The Caribbean, Mexico, and Costa Rica, throughout the Americas. Why, of all places, Bogotá?

Esteban Carril: So I probably think that right now, when we look at the landscape in Latin America, and Colombia, especially Bogotá, it brings several advantages. Talent availability. I was surprised by the English skill sets that the new generations are bringing, especially when it comes to near-shoring operations. It’s also in terms of labor costs. Right now, Colombia is probably bringing the most competitive labor costs in the region. So there are a number of factors. The country, or the city, is currently not really saturated when it comes to the number of GBS organizations. So there are a number of factors why we believe that Colombia, especially Bogotá, is very well-placed today to bring more near-shoring operations.

Finance Colombia: Wonderful. Well, congratulations. I know that it’s going to be a successful stage of growth for you guys.

Esteban Carril: Absolutely. And you’re invited next time to come here. Next year, we’re going to have the same breakfast, and you will be invited to come here as well.

Finance Colombia: Count on it. Absolutely.

Fitch affirmed Ecopetrol S.A.‘s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BB+’ and revised the outlook to negative from stable, reflecting the change in the rating outlook of the Republic of Colombia’s IDR (BB+/Negative).

The strong linkage to the sovereign reflects Colombia’s credit profile. The ratings also reflect the Colombian government’s significant incentive to support Ecopetrol in the event of financial distress. This support stems from Ecopetrol’s strategic importance as a key liquid fuel supplier in Colombia and owner of 100% of the country’s refining capacity.

Fitch affirmed Interconexion Electrica S.A. E.S.P.’s (ISA) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BBB’ and revised the outlook to negative from stable, in line with Ecopetrol. ISA’s credit profile matches its ‘BBB’ rating and is not limited by the credit profile of its controlling owner, Ecopetrol. According to Fitch’s “Parent and Subsidiary Linkage Rating Criteria,” because Ecopetrol owns more than 51% of ISA, linkage should be considered in the assessment. The presence of regulatory ring-fencing mechanisms, material minority shareholders, and a track record of strong governance practices prevents Ecopetrol’s capacity to extract value from its stronger subsidiary.

Fitch views ISA’s funding and cash management policies as highly autonomous from Ecopetrol, expects ISA to maintain its independence, positively reflected in the ratings. Consequently, ISA’s ratings result from a ‘consolidate plus two’ approach to an IDR of ‘BBB’. Any changes in ISA’s corporate governance, business, or financial strategy may exert downward pressure on the company, particularly in the event of a structural increase in its dividend payout ratio.

Fitch affirmed Oleoducto Central S.A. (OCENSA)‘s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BB+’ and revised the outlook to negative from stable, in line with Ecopetrol. OCENSA’s ratings reflect its linkage with Ecopetrol’s credit profile, the largest crude oil producer in Colombia and OCENSA’s main off-taker. OCENSA’s operations are integral to Ecopetrol’s core business due to operational synergies. Ecopetrol relies heavily on OCENSA’s infrastructure to transport crude oil from production fields to refineries and export terminals. Fitch considers OCENSA strategically important for Ecopetrol because it transported 82% of Ecopetrol’s crude oil production in 2Q24.

Fitch affirmed A.I. Candelaria (Spain), S.A.’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BB’ and revised the outlook to negative from stable, in line with OCENSA. A.I. Candelaria’s outstanding notes will remain structurally subordinated to OCENSA’s outstanding $400 million USD notes. As the holding company, A.I. Candelaria depends on dividends from OCENSA to service its obligations. Therefore, a substantial leverage increase at OCENSA could increase the structural subordination of A.I. Candelaria’s creditors.

This risk is mitigated by OCENSA’s record of stable dividend distributions and A.I. Candelaria’s right to veto changes to OCENSA’s dividend policy and capex plans above $100 million USD. Fitch believes the projected dividend stream will be more than sufficient to cover interest expense and principal payments on A.I. Candelaria’s outstanding notes.

Fitch affirmed Grupo Energia Bogotá S.A. E.S.P. (GEB)‘s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BBB’ and revised the outlook to negative from stable, reflecting the change to the rating outlook of the IDR of Bogotá (BB+/Negative). Fitch assesses GEB’s Standalone Credit Profile (SCP) at ‘bbb’. GEB operates independently and autonomously, positively affecting its ratings.

Fitch believes regulatory ring-fencing mechanisms, material minority shareholders, and strong governance practices reduce the parent’s capacity to extract value from its stronger subsidiary. Under Fitch’s “Parent-Subsidiary Rating Criteria,” these factors lead Fitch to rate GEB two notches above Bogotá’s consolidated profile.

Fitch affirmed Transportadora de Gas Internacional S.A. ESP (TGI)‘s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BBB’ and revised the outlook to negative from stable, in line with GEB. Fitch caps TGI’s SCP at Colombia’s ‘BBB-‘ country ceiling, as 100% of the company’s 2024 EBITDA was generated in Colombia.

TGI’s ratings receive a one-notch uplift considering GEB’s medium-to-high operational and strategic incentives to support TGI, equalizing their ratings, per Fitch’s Parent-Subsidiary Linkage Criteria. These incentives reflect GEB’s nearly 100% ownership of TGI and the substantial financial contribution to GEB of approximately 45% of GEB’s operating EBITDA. Fitch also expects investment in Colombia and midstream businesses, such as TGI’s, to remain a strategic focus for GEB’s future growth.

Fitch affirmed Empresas Publicas de Medellín E.S.P. (EPM)‘s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BB+’ and revised the outlook to negative from stable, reflecting the change to the rating outlook of Medellín’s IDR (BB+/Negative). The linkage reflects the financial relevance of the company to Medellín, the lack of effective documentation that limits dividend distribution, and the city’s influence on the company’s administration and operations. EPM’s distributions contribute an average of 20% or more of government revenues and a material 20%-30% of the city’s investment budget.

Fitch affirmed Enel Colombia S.A. E.S.P.’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BBB’ and revised the outlook to negative from stable, reflecting the change to the rating outlook of the Republic of Colombia’s IDR. The company is headquartered in Colombia (BB+/Negative), and its operation in this country represented approximately 90% of its consolidated EBITDA accumulated for the LTM ended September 2024.

Fitch caps Enel Colombia’s SCP at Colombia’s ‘bbb-‘, given the substantial cash flow generation from the country. Cash flows from the operations in Panama (BB+/Stable), Guatemala (BB/Positive), and Costa Rica (BB/Positive), exceed the company’s hard currency debt service coverage for the next 12 months by more than 1.5x.

Hidroituango hydroelectric dam. (Photo credit: EPM)

The $130 million USD equity investment includes a previously disclosed secured convertible note issuance of $40 million USD from Hoche Partners Pharma Holding S.A. in mid-October 2024, intended to provide Procaps with liquidity during a period of financial distress. This note has since been converted into ordinary shares. The remaining $90 million USD was raised through a private placement of ordinary shares. The investor group comprises Chemo Project S.A., Becaril S.A., Flying Fish Ventures L.P., Saint Thomas Commercial S.A., Santana S.A., Hoche Partners Pharma Holding S.A., and other undisclosed investors. This collective now holds approximately 90% of Procaps’ shares.

The involvement of Hoche Partners in Procaps’ financial restructuring follows a period of contention between the Chilean-origin investment firm and the company’s previous management. In November 2024, Procaps received notification from Nasdaq regarding the suspension of its stock listing after failing to file its Form 20-F for the fiscal year ending December 31, 2023, with the US Securities and Exchange Commission (SEC).

This situation arose after Hoche Partners Pharma Holding initiated legal action through the US law firm Gibbons P.C. due to identified irregularities in the company’s accounting. Hoche Partners had proposed a change in management to address the delays in financial reporting.

According to a letter submitted to the SEC by Gibbons P.C. on behalf of Hoche Partners in late October, the investment firm had offered a $40 million USD liquidity injection to Procaps on October 20, 2024. The proposal outlined an immediate availability of half the funds, with the remaining half to be raised and invested before the end of the year.

Gibbons P.C. stated that this offer was contingent upon changes in corporate governance and voting rights affecting the majority shareholders while allowing them to participate in capital increases. Another condition involved the majority shareholders reimbursing the company for expenses related to the accounting investigation. However, Procaps’ management reportedly rejected this proposal and presented counteroffers deemed “unacceptable” by Hoche Partners. Consequently, Hoche Partners withdrew its offer on October 28, 2024.

Despite the withdrawal, Hoche Partners now intends to play a significant role in guiding Procaps’ transformation and supporting its long-term strategy. The new shareholder base, which includes investors with experience in the healthcare and pharmaceutical sectors, is expected to actively participate in the company’s turnaround efforts.

Alejandro Weinstein, Chairman of the Board and representative of Hoche Partners, stated, “With this strong and committed investor group that trusts the future of Procaps, the company is now in a position to stabilize, rebuild trust, and create long-term value through operational discipline and a renewed strategic focus.”

Simultaneously, Procaps finalized a comprehensive restructuring of approximately $209 million USD in debt that was previously under forbearance. The agreement with key lenders includes:

• Extension of debt maturities and revised payment schedules to improve near- and mid-term cash flow.
• Reprofiling of financial obligations to align with the company’s operational turnaround timeline.
• Adjustment of financial covenants to better reflect current operations and the strategic plan.
• Preservation of liquid assets to support ongoing operations and strategic initiatives.
• As part of the debt restructuring, certain lenders have agreed to convert a portion of their debt holdings into equity in the company, indicating an alignment of interests with Procaps’ long-term prospects.

Interim Co-Chief Executive Officer Melissa Angelini commented, “This financial reset gives us the breathing room and flexibility to focus on what matters: rebuilding the core of the business and creating sustainable value.”

These financial maneuvers follow a challenging fiscal year 2024 for Procaps. The company’s current focus is on executing a turnaround strategy that includes addressing the findings of a previously disclosed internal investigation related to internal controls, governance, and financial reporting. Procaps is also in the process of finalizing the restatement of prior-period financial statements and intends to release its audited 2023 and 2024 financials as soon as practicable. The delay in filing its Form 20-F was a key factor leading to the Nasdaq delisting notification.

Additional elements of the turnaround strategy include implementing structural cost-efficiency measures, centralizing decision-making, and prioritizing margin expansion through operational discipline and business simplification.

In a significant organizational shift, Procaps has relocated its corporate headquarters to Bogotá, Colombia. This move aims to centralize strategic, financial, and executive decision-making closer to the company’s primary markets. However, the company’s operational footprint in Barranquilla, where manufacturing plants, product development, and other key operational teams are based, will remain unchanged.

The headquarters relocation is part of a broader internal reorganization that involves the centralization of finance, financial planning and analysis (FP&A), compliance, legal, and information technology (IT) functions. The company is also implementing leadership transitions to foster a performance-oriented management culture, enhancing governance structures, and strengthening internal controls, reporting mechanisms, and operating discipline.

To enhance accountability and improve commercial performance, Procaps is reorganizing its operations into five regional clusters: Colombia, Brazil (B2B), United States (B2B), Andinos (comprising Peru, Ecuador, and Bolivia), and CENAM (including Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, and the Dominican Republic).

Furthermore, Procaps is actively pursuing strategic alternatives for non-core assets, with several discussions reportedly in advanced stages. The potential proceeds from these sales are intended for debt reduction and reinvestment in high-margin, strategic assets and operations.

With a restructured capital base and new leadership in place, Procaps states its focus is on restoring profitability through operational efficiency and cost control, reinforcing governance and transparency, delivering on its remediation plan, divesting non-core assets, and investing in innovation and commercial growth, particularly in prescription drugs and expanding its contract development and manufacturing organization (CDMO) global footprint. The company faces the ongoing task of addressing its delayed financial filings to regain compliance with Nasdaq listing requirements.

Greenberg Traurig, LLP advised Procaps as lead transaction and US counsel, Arendt & Medernach S.A. as Luxembourg counsel, and Philippi Prietocarrizosa Ferrero DU & Uria as Colombian and Peruvian counsel. FTI Consulting served as the company’s exclusive financial advisor.

Photo credit: Procaps Group website.