The International Finance Corporation (IFC), a member of the World Bank Group, is boosting its support of Colombia's infrastructure sector by helping launch a specialized finance institution that will play a critical role in securing the financial resources needed for the country's upcoming large-scale infrastructure projects.
IFC is investing US$70 million in Financiera de Desarrollo Nacional (FDN), which will operate as a specialized financial institution that will mobilize funding for Colombia's infrastructure projects, including a new toll-road program that will represent a crucial upgrade to solve some of the country's infrastructure bottlenecks. IFC will have a 20% equity stake in FDN.
In addition to its financing role in the infrastructure sector, FDN will bolster the local know-how through a special public-private partnership unit that will focus on structuring infrastructure projects. In October last year, IFC and FDN each provided US$2 million to support the creation of this unit.
Colombia needs about US$40 billion in infrastructure investments and FDN will help ensure the participation of the private sector in financing these projects, which will bolster the country's sustainable economic growth and improve its competitiveness.
FDN will serve as key supporter for these plans and help Colombia's financial industry meet this financing need by offering long-term loans and tailor-made financial tools that will attract institutional investors to these projects. FDN will initially focus on supporting the financing of the toll road programs, but will eventually help address the financing needs of all segments of the Colombian infrastructure sector.
Jin-Yong Cai, IFC Executive Vice President and CEO, stated:
This investment will be instrumental in providing infrastructure finance and developing capital markets in Colombia. It will support inclusive economic growth, and improve the overall competitiveness of the Colombian economy.
Mauricio Cárdenas, Colombia's Finance Minister commented:
With this funding, FDN will have a greater capacity to finance the different infrastructure projects that are a priority for the country.
Clemente del Valle, FDN's president, added:
With this new step, FDN strengthens its autonomy and financial capacity and consolidates itself as the leader of infrastructure finance in Colombia.
This unit will support the development of well-structured public private partnerships at the national and regional level.
In Colombia, IFC is engaged in supporting sectors essential to social and economic development, such as infrastructure, health, education, agribusiness, and public-private partnerships to build ports, roads, and airports. IFC's current investment portfolio in projects in Colombia is $1,5 billion, of which $500 million was mobilized or syndicated from other banks.