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The Bogotá-Villavicencio road concession has reached financial close with a financing package of COP1.6 trillion (US$562.86 million). The project involves the operation and maintenance of the existing 85.6km road linking Bogotá, the capital city of Colombia, to Villavicencio, to the south-east, in the department of Meta, and the construction of a 22.6km dual carriageway.
The project is expected to cut journey times between Bogotá and Los Llanos (the Plains) by between 120 and 210 minutes. Vehicles will be able to travel at up to 80km/h, which is projected to save 28% of time and 68% of operating costs. It was awarded to Coviandina, an special purpose company created by Episol and Concecol, in June 2015. Construction is expected to be completed in March 2022.
The national development bank Financiera de Desarrollo Nacional (FDN) is providing a COP400 billion (US$140.7 million) loan with a term of 10 years. An undisclosed local bank are providing an COP800 billion (US$281.4 million) loan also with a term of 10 years. The project will also receive a COP400 billion (US$140.7 million) 20-year loan from Compartimento Deuda Privada Infraestructura I, a fund managed by Credicorp Capital and Sura Asset Management.
This is the first time that Mini Perm loans have been utilised for project finance in Colombia. They allow the participation of international banks with restrictions on long-term financing. They will cover the costs of construction and later be refinanced with loans with longer terms.
The project is part of the Colombian government's national infrastructure development programme: the 4G (fourth generation) Toll Road Concession Programme (Cuarta Generación de Concesiones). The programme consists of 40 projects that will cover 7,000km of toll roads and require an investment of around COP47 trillion (US$16.5 billion) to construct.
This is the third project in the programme to achieve financial close. As reported on this platform, FDN announced the financial closes of the Antioquia-Bolívar and Bogotá-Girardot road projects in December.
Also, to date, the project has created over 3,500 jobs.