A group of top executives from Colombian infrastructure companies gathered in New York City yesterday on a rainy morning, trying to convince their audience of US investors that the Andean country is one of the best places to put their money currently.
The country’s highly-touted public-private partnership (PPP) programme, dubbed “4G program,” aims to award 40 concessions in toll roads and highways, with a total of 12 to be awarded this year and another 28 to be awarded next year, Clemente del Valle, chief executive officer of the Financiera de Desarrollo Nacional (FDN), Colombia’s national development bank, told the audience at the Colombia InsideOut conference.
Calling the bank “a new kid in town,” Del Valle said the purpose of his trip to the Big Apple was to “get ourselves known, what’s our philosophy, who are our owners… hopefully we will bring transactions (here) next year.”
Infrastructure Investor saw at least one investment bank based in New York eagerly approach him and want to set up collaborations with the bank in Colombia.
The head of FDN said the role of his organisation in Colombia’s infrastructure market is as a catalyser, facilitating financing in the 4G program in a similar way to the role of the International Finance Corporation on a global level.
The FDN was created to help design and structure bankable projects, and to help mobilise long-term financing from institutional investors and banks that are willing to take project risks, Del Valle told the audience.
The bank is working on several initiatives to achieve its goals. Among them, the bank is developing refinancing bonds that could be offered to concessionaires, he said.
The FDN's pilot refinancing bond got an AA+ rating from Fitch. “We’ll get a higher rating for the bonds with guarantees and the quality of the contracts once they start,” Del Valle told reporters on the sidelines of the event.
Through the initiative, FDN was showing to international consortia that “we could develop bonds that have low project risks, and get higher ratings,” he said, adding that money from pension funds can also be mobilised – both from local and international markets.
Apart from developing financing structures, the FDN also plans to issue bonds on its own to support the country’s 4G program, Del Valle told reporters.
The general idea is to raise $500 million worth of bonds each year from 2015 to 2019. The bonds may be priced in local pesos or US dollars, depending on demand from the companies that participate in the 4G program, he added.