2017 In Review : Infrata's Activity in Colombia
Since Infrata undertook its first due diligence on the Manizales Airport project in 2014, our consultants have been collaborating with sponsors and investors in developing Colombia’s transportation infrastructure as Lenders’ Technical and Traffic Advisors. Year on year, we have continued to grow our presence in the country and our portfolio now includes some of the region’s most significant projects. 2017 was the biggest year yet for Infrata in Colombia, with new appointments on both greenfield and acquisition projects, and we also welcomed our first resident Colombian team member, who is based in Bogotá. Having a local base is well timed, as 2018 looks set to be an even bigger year!
2017 kicked off with Infrata being appointed to provide technical advisory services on the Autopista al Mar 2 project. The project is planned to reach financial close in early 2018, and Infrata will shortly commence construction monitoring activities. Throughout 2017 the due diligence of the Bucaramanga – Barrancabermeja- Yondó project continued and financial close was postponed until 2018. During the first quarter of 2017, our consultants also carried out the technical due diligence of the Transversal Sisga project prior to the first payment milestone. Infrata’s involvement in Mulaló – Loboguerrero Highway, which we were first appointed on in 2015, is expected to recommence in 2018. Infrata is set to undertake construction monitoring on all of these projects, which are all anticipated to reach financial close in 2018.
Infrata also increased its activity in the secondary market in 2017. Our advisors undertook the technical due diligence in relation to Eiffage’s acquisition of stakes of the Santana Mocoa Neiva Highway, which is currently at the Preferred Proponent stage. Eiffage will participate as a 50/50 partner with CASS Constructores, who holds a 30.78% share in the Aliadas para el Progreso SPV, and will also be a co-contractor for the highway construction alongside CASS Constructores.
Furthermore, following a successful delivery of technical advisory services to InfraRed on its first investment in Latin America (50% stake acquisition in Perimetral de Oriente de Cundinamarca Highway in 2016), in 2017 Infrata acted as technical advisor for InfraRed’s acquisition of stakes in the Antioquia - Bolívar Highway (Ruta al Mar) project. On December 14th, InfraRed agreed to acquire a 50% stake in the SPV Ruta al Mar and 50% of the subordinated debt associated with the project. SPV Ruta al Mar is the first issuer of debt to the international investors following the Odebrecht bribery scandal which the Colombian market faced.
Whilst the PPP market in Colombia has remained active in 2017, primarily due to the 4G road projects, a number of transportation projects were anticipated to achieve financial close. By year end only the Antioquia - Bolívar Highway (Ruta al Mar) project had successfully achieved this milestone, alongside Autopista Conexión Pacífico 2, which was initially expected to reach financial close in 2015. Infrata understands that a new legal framework, expected to help projects achieve financial close, has been under development and was scheduled to be signed into law by the end of 2017. With this in mind, 2018 could be Colombia’s most active year to date!
References: Inframation News
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