Colombian gas projects attract financing interest

Colombia's state-owned development bank FDN is evaluating additional gas infrastructure projects after backing the Pacific regasification terminal, commercial director of structured finance Sylvia Gasser told BNamericas.

BNamericas: There is great uncertainty around gas supply in Colombia. How does FDN view that sector and how is the appetite for financing these projects?

Gasser: Gas is a sector we have been reviewing since last year. We already completed our first financing in the Pacific regasification terminal project.

What we analyzed there was the gas supply issue and the importance of those projects for Colombia’s infrastructure development. We are also reviewing other regasification and gas infrastructure projects because timing is critical in these projects. Whether they move forward at the right time determines whether they can generate the expected profitability and repayment capacity.    

Sylvia Gasser

BNamericas: Could FDN also finance other LNG infrastructure projects belonging to private companies?

Gasser: Yes. In LNG we participated in the regasification project and we remain open to other opportunities. We recently participated in the Naturgas conference, where we held one-on-one meetings with companies reviewing infrastructure investments.

As a development bank, we are looking at how we can offer solutions and products adapted to financing gas infrastructure projects. We can finance private companies directly through project finance structures, and many of our financings have in fact been for private companies.

BNamericas: What is currently the biggest challenge for investment in renewables and batteries in Colombia?

Gasser: The biggest challenge is certainty and stability. Investors need clarity in the regulatory, financial and legal framework for project development.

That allows projects to move forward on schedule and gives confidence to financiers because many projects start but fail to reach financial close due to unresolved uncertainties. Those delays can generate cost overruns and discourage investors.

BNamericas: And that's something we've seen a lot in Colombia's energy sector in recent years.

Gasser: Financiers are ultimately trying to mitigate technical, legal, insurance and financial risks. If there are still too many unresolved gaps, financing cannot close.

You can have a well-developed project, but if there is no certainty about connection points or no properly structured contract for energy sales, it becomes very difficult for financiers to support the project and for it to achieve financial close.

(The original version of this content was written in English)