Those individuals and companies held responsible have five business days to appeal, and certainly will do so. One of the primary contractors, Colombian construction firm Conconcreto already stated that it does not agree with the ruling and has instructed its legal team to take necessary steps.

Colombian presidential hopeful Sergio Fajardo is one of the defendants the comptroller held responsible in today’s ruling, along with former Medellín Mayor Federico Restrepo, former candidate Alonso Salazar, and former CEO of EPM / current CEO of Cementos Argos, Juan Esteban Calle. Former mayor of Medellín and suspended governor of Antioquia, Anibal Gaviria was cleared of responsibility, as was former EPM director Jorge Mario Pérez Gallón.

Fajardo issued a brief statement on Twitter saying “I have the certainty and peace of mind that we did well, my team did well, with absolute transparency. We will work on the appeal for reconsideration to show my innocence before the Comptroller’s Office. A lot of calm and a lot of concentration.”

To download the entire ruling document (in Spanish) click here

With last week’s payment of $100 million USD to EPM by Mapfre, the utility has collected a total of $350 million destined to the recovery of the hydroelectric project. EPM states that it expects Hidroituango to begin electrical production by the end of 2022 with two generation units coming online, and the six remaining units between 2023 and 2025.

“The 350 million dollars received to date for the compensation of the contingency in the Ituango Hydroelectric Project, through the ‘all-risk construction and assembly’ policy, are the product of this new payment of $100 million dollars, added to the $150 million dollars delivered by Mapfre in December 2019 and the $100 million dollars reimbursed in September 2020,” said EPM General Manager Jorge Andrés Carrillo Cardoso.

EPM also indicated that it is insured with Mapfre against delays in the project coming online and generating revenues for up to $628 million dollars.

According to Colombia’s Comptroller General, those financially responsible for the Hidroituango loss are:

1. 1. 1. 1. Federico José Restrepo Posada
         2. Juan Esteban Calle Restrepo
         3. Alejandro Antonio Granda Zapata
         4. Fabio Alonso Salazar Jaramillo
         5. Alvaro Julian Villegas Moreno
         6. Sergio Betancur Palacio
         7. Alvaro de Jesús Vásquez Osorio
         8. Ana Cristina Moreno Palacios
         9. Iván Mauricio Pérez Salazar
         10. Jesús Arturo Aristizabal Guevara
         11. Luis Guillermo Gómez Atehortúa
         12. John Alberto Maya Salazar
         13. Luis Javier Vélez Duque
         14. Maria Eugenia Ramos Villa
         15. Rafael Andrés Nanclares Ospina
         16. Sergio Fajardo Valderrama
         17. Luis Alfredo Ramos
         18. Integral S.A.
         19. Integral Ingeniería de Supervisión S.A.S., sucesor de Solingral S.A.
         20. Construcoes E Comercio Camargo Correa S.A.
         21. Constructora Conconcreto
         22. Coninsa Ramón H S.A.
         23. Ferrovial Agroman Chile S.A.
         24. SAINC Ingenieros Constructores S.A.
         25. Ingenieros Consultores Civiles Y Eléctricos S.A. Ingetec
         26. Sedic S.A

For publicly owned companies such as EPM, it is customary that company heads resign at the end of the terms of their political patrons, making way for the new elected official to appoint executives of their choice. Colombia is considering drafting legislation to change this policy and restructure the way publicly owned companies operate, making way for more business continuity, adding insulation from political pressures, and complying with governance recommendations as it seeks to join the OECD.

Federico “Fico” Gutierrez is the new Mayor of Medellin

Londoño de la Cuesta studied systems engineering at EAFIT University in Medellin and also, matriculated through the CEO program at Universidad de Los Andes in Bogota. For 27 years he served as general manager for Invamer SAS, leading efforts in research, market consultancy, business analytics and social media. During that time, he had the opportunity to get to know Colombian industry, along with the needs and expectations of the consumers from diverse areas such as manufacturing, finance, and public services.

• Londoño was appointed by the new mayor of Medellín, Federico Gutiérrez Zuluaga on January 1, 2016 to lead EPM for the next four years.

• Londoño replaces Juan Esteban Calle Restrepo, former CEO of EPM and EPM Corporate Group, who served from 2012 through 2015

“With the support of all workers at EPM, from whom I stressed their experience, professionalism and social commitment, I hope that I can share my knowledge and experience to continue contributing to build sustainable and competitive territories, with projects and innovative solutions that contribute to the quality of life and the well-being of communities in all geographies in which we operate as a business group,” said the new general manager. ¨In the next four years we will be working on providing efficient public services that meet people´s needs, with a team committed to bringing EPM closer to citizens’hearts.”

During his professional career, he was also the president of Asdesilla (Association of native horse breeders), and an advisory member of the board of Casa Luker and to the presidency of Exito Group. He has also been a columnist for magazines such as: Poder, Cambio, and Dinero and also for the newspaper El Tiempo, and he has participated as a guest speaker and teacher at local, national and international universities, such as: The Sorbonne of Paris (France), the London School of Economics, and the University of Miami.

Londoño De la Cuesta, 50 years old, is married to Monica Echavarria, and father of daughters Luciana and Raquel, both students of business administration. When time permits, he makes space for horse riding and to enjoy nature, and declares himself a lover of art, music, painting, dance and poetry.

Cover photo: new mayor Federico Gutierrez (left) thanks outgoing EPM general manager Juan Esteban Calle Restrepo. All photos courtesy of EPM.

Bank of America and HSBC Securities served as global coordinators, joint bookrunners and mandated lead arrangers. The rest of the syndicate was made up of Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking as mandated lead arrangers and joint bookrunners, and Citigroup Global Markets, JP Morgan Securities, and Mizuho Bank as lead arrangers.

The loan was authorized by the Ministerio de Hacienda y Credito (Finance Ministry) on December 22, by degree #4783, and the deal was signed on December 29 by the banks and Juan Esteban Calle Restrepo, general manager of EPM.

83% of the loan will go towards energy, such as the Ituango Hydroelectric Project, and 17% will go towards EPM’s waterworks businesses.

The loan is disbursable over a 12 month period and has a term of 5 years. The interest rate is LIBOR+1.40%. The loan will finance the investment plan and $12.4 billion 2016 budget for EPM, approved by the board of directors on November 24 of last year.

“This operation represents a diversification of the sources of financing for our enterprise, and the consolidation of a long-term commercial relationship with this important group of international banks that back the growth strategy and diversification of projects and businesses of Grupo EPM,” said Calle.

“The competitive conditions practiced in this operation ratify the trust and the solid reputation that EPM projects in the international financial environment, even amidst an economic landscape of high volatility in international markets.”

Over the next four years, EPM plans to make $2.4 billion USD in investments to develop expansion projects, modernization and growth in the energy, gas, and water sectors, along with social responsibility and environmental programs that will contribute to sustainable growth of the enterprise and the areas in which it operates.

Photos of loan closing courtesy of EPM

Health, roads, housing, education, employment, public services, improved institutionalization, and recreation are the areas that have been promised shares of the $1.8 billion ($600 million USD approx.) investment associated with building the Ituango dam and power generation facility.

• Sabanalarga, Santa Fé de Antioquia, Olaya, Buriticá, Peque, and Liborina are the towns that are within the project’s investment zone.
• A public accounting was held last Thursday outlining the project’s progress, and outlining the benefits promised to the affected communities.
• Specifics were offered regarding investments in housing, public services, employment, education, roads, and health.

CEO of EPM Juan Esteban Calle Restrepo said at the event: “The Ituango Hydroelectric Project has become an example of the integration of a public work with the territory and its people; a beacon of hope that generates more and newer opportunities for everyone. This is a historic occasion for the region’s wellbeing and development.

The Ituango Hydroelectric Project “Rendicion de Cuentas” took place in the Liborina Coliseum

Commitments made as part of the Ituango Project according to EPM:

• Education – 2 new schools were built, and 31 were improved.
• Roads – 629km of roads were improved.
• Health – 6,613 families received primary healthcare, and 81 schools received the “healthy schools” designation.
• Productive Projects – In 164 rural paths throughout the area, 4,029 families participate in “productive projects” and 12 social organizations are beneficiaries of family agriculture projects.
• Institutionalism – More than 250 people that live in the west and north of Antioquia study in the School of Human Rights. Access to justice services in the region
• Participatory Budget Planning – 34 projects were prioritized in the indicated communities.
• Public Services – 1,880 families now have natural gas in Liborina, Olaya, and the Sucre Township, Sabanalarga, and those living along the route towards Sabanalarga. In Santa Fe de Antioquia, now there are 2.830 families that have EPM natural gas, through 11 commercial outlets.
• Rural Electrification – EPM, through the Antioquia Illuminated program has connected 4,797 families in rural Antioquia to electrical services.
• Water and Sewage Services – Improvements have been made in the water and sewage systems servicing all six municipalities.
• Housing – 435 families have benefitted from housing improvements, or new homes. Of these, 100 have involved the Aldeas de EPM program, which repurposes the mature woods harvested from the reservoir areas.
• Employment – The Ituango Hydroelectric Project has generated 7,000 direct jobs, of which 2,200 are in the six affected municipalities, and 20,000 indirect jobs. 329 of these jobs are held by residents of western Antioquia that work directly for the project. Another 373 jobs have been created by the additional investment in social infrastructure.
• Synthetic Football Pitches – Liborina, Peque, Buriticá, Olaya, Santa Fe de Antioquia, and Sabanalarga are already enjoying new Astroturf soccer fields sponsored by EPM, to promote sport, a healthy lifestyle, and civic spirit.
• Goods and Services – EPM and Ituango contractors are purchasing an estimated $32 billion COP of goods and services in the region, spurring the local economy and benefitting local businesses.

The $3.5 billion COP Ituango Hydroelectric Project is 33% complete, and will provide 17% of Colombia’s anticipated electrical demand of 2,400 megawatts in the year 2022.