The investment banking firm is involved with at least one $260 million bond relating to the country’s infrastructural renewal.
In Colombia, the government is embarking on one of the country’s largest infrastructure projects, renewing the highway network with several more sophisticated roads following shorter and more efficient routes, all under the name 4G highways. In a country where many provinces suffer a disconnection with the economic centers, a project like this is sure to make an impact in some of the more remote regions.
In fact, in the World Economic Forum’s global competitiveness index, Colombia’s highways ranked 126th out of 140 for their quality.
It will be costly to make the improvement however. So much so that when the government sold its third largest energy provider, ISAGEN, earlier this year to Canadian asset managers, financing the new 4G highways was one of the reasons that supported the controversial transaction.
Now however, the government is in need of further funding. The first surprise came from investment banking giants Goldman Sachs, which emitted bonds for $260 million to government contractors. This sum will be directed towards the Pacifico 3 highway that will run through 3 of the country’s departments, and is expected to generate around 2.700 direct jobs.
For Juan Manuel Santos, the Colombian president, the fact that the investment made in its entirety “meant that there is great trust in all that we do regarding developing and constructing infrastructure works and in particular in the 4G project”, he also added that this is the first time they are recurring to these methods to finance infrastructure projects.
Following on Goldman Sachs’ steps is LatAm’s biggest bank (by market value), Itau Unibanco Holding, which is now lined up for a loan as large as $300 million for the next stage of the project, the Pacifico 2 connection.
The 100 kilometer Pacifico 2 highway will help connect Colombia’s second largest city, Medellin, with the country’s largest pacific port in Buenaventura.
LatinAmerican Post |Pedro Bernal