ISA branches out with $3bn toll road deal

Energy group Interconexion Electrica (ISA), majority-owned by the Colombian government, signed an agreement with the Colombian authorities last Friday to design, build, finance and maintain $2.8 billion of roads.

ISA: branching out into roads

The contract requires ISA to draw up technical, legal, financial, environmental and traffic studies ahead of the building of four roads comprising some 1,251 kilometres. The project – known as Autopistas de la Montana – will receive about $1 billion from the Colombian central government and two regional authorities with ISA expected to come up with the remaining $1.8 billion. The roads will link Colombia's second-largest city, Medellin, with the Caribbean coast and other cities.

ISA first showed interest in the roads project in 2007, when the Colombian government invited the firm to join a special infrastructure task group. The contract is part of its stated objective of deriving 20 percent of its revenues from businesses other than electricity transportation by 2016. By that date, the company also expects 80 percent of its revenues to be generated outside Colombia.

Autopistas de la Montana will be the first time ISA signs up to build and operate a road contract. As such, it is likely to make use of the expertise it now has after acquiring a 60 percent stake in toll road operator Cintra’s Chilean business. The €209 million deal was concluded last year and ISA has a put option to acquire the remaining 40 percent in Cintra Chile, which owns majority stakes in five concessions that form part of Chile’s Ruta 5, the country’s main north-south road artery.

ISA generated $1.3 billion in revenues during the first nine months of 2009.