Colombian bank raises bar for infra financing

Head of Colombian bank Bancolombia, Juan Carlos Mora, said that in the aftermath of the Odebrecht scandal the bank will be "very cautious" regarding the approval of infrastructure initiatives.

Mora told daily La República that the bank, which was a financier of the now canceled Ruta del Sol 2 concession, has currently funding over 2tn pesos (US$702mn) approved for infrastructure projects.

However, following the cancellation of the contract last year, and the ongoing negotiations between lenders and infrastructure agency ANI, the executive said that "today we have higher requirements and we are looking at the projects with a lot more care," RCN Radio quoted Mora as saying.

Mora said that the scandal highlighted the fact that financiers face new risk factors. "When a constructor is involved in bad faith or illegal activities, we who have been participants in good faith shouldn't be affected by that type of circumstances," he said.

Bancolombia's head praised part of the newly passed infrastructure law, which allows banks to regain their investments when contracts are canceled, but he maintained that the new rule could still be improved.

Last week, President Juan Manuel Santos said that the 4G highways program required more foreign financiers, since the needs of these projects "scared" local banks.