World Bank member the IFC is part of a consortium of investors which is backing Pacific Midstream – a company building oil and gas pipeline networks in Colombia – to the tune of $320 million.
The investment is the largest by an IFC-led consortium in Colombia’s infrastructure sector and includes the IFC Global Infrastructure Fund, which closed on $1.2 billion in October 2013.
A statement said that the consortium would provide a further $60 million over the coming months to Pacific Midstream, which is an affiliate of Pacific Rubiales Energy Corp, the largest independent oil producer in Colombia.
Pacific Midstream develops pipelines and other hydrocarbon infrastructure to help address a gap in Colombia’s oil pipeline network resulting from a surge in oil production. Growth in the oil and gas industry has been constrained by bottlenecks.
Improving Colombia’s pipeline network will result in lower transportation costs for oil and gas producers and will also reduce the environmental footprint of the industry as pipelines increasingly replace oil trucking.
It is not the first time that the IFC has struck a deal with Pacific Rubiales. In 2013, the IFC and two funds managed by the IFC Asset Management Company invested $150 million in Pacific Infrastructure Venture, an affiliate of Pacific Rubiales which is building a new port terminal designed for the shipment of Colombia’s crude exports.
Of the Pacific Midstream deal, Lance Crist, IFC’s global head of oil and gas, said: “This transaction strengthens our partnership with a leading player in the sector, building a well-capitalised platform that would be able to grow through investment in midstream opportunities in the region.”