Development Bank of Latin America (CAF) to Provide US$2 Billion in Financing to Colombia – Bloomberg Interview with President Sergio Díaz-Granados

Bogotá — The financing that CAF will provide to Colombia will be US$2,000 million this year. This was confirmed in an interview with Bloomberg Línea by the president of the Development Bank of Latin America (CAF), Sergio Díaz-Granados. These resources will be allocated to sovereign financing for nearly US$520 million; non-sovereign, with another US$500 million; and to the private sector for US$1,000 million, which can be used for financial deepening and financing for SMEs, among others.

In the case of sovereign financing, that is, for the National Government, Díaz-Granados indicated that they will develop projects for adaptation to climate change, health, infrastructure and education. “In the health sector there is an initiative that is being structured to, basically, expand coverage and telemedicine. In fact, we are already doing a pilot in La Guajira, which can be scalable, and it is together with the team from the Ministry of Health.”

Likewise, he commented that in education work is being done to expand rural school coverage. “Two weeks ago we delivered a pilot project in San Antonio de los Brazos in Timbiquí (Cauca), which is basically the demonstration of how school coverage can be improved in remote areas of Colombia, with water, electricity, connectivity and creating much more resilient communities.”

On the other hand, the CAF has expressed to the Petro Government its interest in accompanying the effort of COP16, which will take place this year in October. “A very important event for Latin America and the Caribbean and for the world in terms of multilateral negotiation for biodiversity, but for Colombia in particular. We also hope that part of the financing to the Executive strengthens the matrix of reforms regarding biodiversity,” said the president of CAF.

Regarding non-sovereign financing, that is, without guarantees from the Nation, he spoke of energy infrastructure and financing of local governments, where they are reviewing possibilities in different departments. “What we want is to work hand in hand with them, especially on projects that have an impact on the quality of life. The Government of Boyacá already gave us two very interesting initiatives, one on the Sogamoso River and another for the restoration of the Boyacá Bridge, which is part of the tourist recovery of the Libertadora Route between Colombia and Venezuela throughout the Boyacá and Santander corridor. ”.

The executive stated that the portfolio they have in Colombia has been evolving well and that they hold regular meetings with the economic teams, “in fact, two weeks ago I was with the Minister of Finance, Ricardo Bonilla, and the Minister of Commerce, Germán Umaña, reviewing the strategies. We have managed to make progress on many fronts and one of the goals we had at the beginning of my administration is for the CAF to be more present within the country and to further expand its regional presence, we are doing that.”

In that sense, he emphasized that the multilateral bank led by CAF together with the National Government managed to make adjustments so that the National Development Plan allowed working with local currency within the Colombian market. “We are faced with the challenge of transferring long deadlines and lower rates to local governments to help them streamline works, especially of an urban nature.”

Financing of the Canoas WWTP

This is another of the budding projects, whose financing depends on other conditions, but in which the Development Bank of Latin America and the Caribbean has already made an offer to accompany it and due to the importance it has for the country and the decontamination of the River Bogota. Here the financing, according to Díaz-Granados, could be between US$200 million and US$400 million.

“This project would give a boost to the 2030 agenda in Colombia in the objective of clean water and sanitation. The Bogotá River is one of the most polluted in the world, as well as its discharge of contamination and pollution to the Magdalena River, so anything we do there will have an impact on the quality of life of the riverside populations until the end of the basin and this would be the largest residual treatment plant in South America,” said the president of the Development Bank of Latin America and the Caribbean.

Let us remember that the objective of the WWTP is for the plant to be responsible for receiving wastewater from the Fucha, Tunjuelo, Tintal basins and the urban area of ​​the municipality of Soacha, transported by the Fucha-Tunjuelo, Tunjuelo-Canoas interceptors and elevated by the Canoas pumping station, which represents 70% of the wastewater produced by the city.

Financing of the second line of the Bogotá Metro

This project has already been approved by the CAF board for an amount of US$255 million. “Simply when the Nation needs the resources, they will be available.”

It was approved in 2023, which means that it is financing that does not fall within the US$2 billion already mentioned for this year.

This financing, he recalled, belongs to the Global Gateway program, which also includes the European Investment Bank, the IDB (Inter-American Development Bank) and the World Bank. “Of the four banks, we were the first to approve.”

The bet for Latin America

Díaz-Granados mentioned that CAF closed 2023 with important achievements in management, where the maximum level in credit ratings was reached. “We made several successful placements in the market, which has allowed us to leverage more projects in the region. In fact, we had portfolio growth of almost 9.5% last year and this year we are aiming to place close to US$16.8 billion in financing throughout Latin America and the Caribbean. With this, the Bank is consolidated as one of the main sources of financing in development.”

Along these lines, he said that in Uruguay they are launching the investment guide for tourism and the presentation of a public-private fund for the financing of infrastructure works, “which we do with pension funds and our window of the private sector. This fund is growing, not only the Bank’s traditional financing through governments, but also by mobilizing resources from the private sector. We are going to have growth this year on this side as well,” she concluded.

2024-02-21 06:12:09
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