CAF raising up to US$2bn for Colombian infra projects

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Friday, October 24, 2014

Latin American development bank CAF is urging Colombian institutional investors to put their money into a fund to develop much-needed infrastructure projects, an official said at the BNamericas 5th South America Infrastructure Summit.

CAF aims to raise 2tn-4tn pesos (US$1bn-US$2bn) from investors such as pension funds in the investment vehicle run by the development bank itself.

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"This fund aims to take infrastructure projects to pension funds," CAF senior executive Jorge Gartner told the conference in Bogotá.

Gartner added the fund should be finalized by December and start evaluating projects in January and February.

Timing is crucial. Colombia is in the process of tendering 40 highway projects for US$25bn.

Gartner also said CAF's loan portfolio growth will slow down this year, after jumping 10.5% in 2013, but would rebound next year with the financing of Colombian highways.

"We believe the biggest growth will take place next year," Gartner said.

Colombian banks and pension funds will finance half of the country's 4G highway master plan, which includes 8,000km of roads, tunnels and bridges.

Infrastructure agency ANI has estimated local banks and pension funds will finance 10tn-15tn pesos worth of projects, while foreign banks are expected to extend credit lines of 13tn pesos, private equity funds will supply 7tn pesos and state financing agency FDN between 5tn and 7tn pesos.