By Ben Miller
Andean region: Travelling light
Colombia is set to start awarding its $22 billion highway concession program. But managing the financing is easier said than done
While travel by road in Colombia has never been easy, finding
the funds for upgrading the country’s highways has
been almost as complicated.
The country has made some infrastructure financing
innovations over the years. But now a $22.5 billion package of
road concessions – dubbed the fourth generation (4G)
program – is set to test the limits of the
country’s financial markets.
The first of four sets of concessions in the 4G series opens
for bidding this year. It is expected to be worth about $2.2
billion. Colombia’s bank lending market could
cover this, as it has for many other infrastructure projects.
But it would struggle with the unprecedented size of the total
program – and there are worries that such funding
would shut out other borrowers from bank lending.
The government and the private sector see a capital markets
take-out as an obvious solution....
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