Bogota, Colombia, January 27, 2016
—IFC, a member of the World Bank Group, is boosting its support of Colombia’s infrastructure sector by financing the launch of a fund that will play a crucial role in deploying financial resources for the country’s large-scale infrastructure projects.
IFC will invest about US$48 million in an infrastructure debt fund that is designed to mobilize financing from pension funds, a mostly untapped source of capital for infrastructure projects in emerging economies. IFC’s support has been crucial for the fund, which will be managed by Lima-based Credicorp Capital and Colombia’s Sura Asset Management, to raise about US$400 million.
IFC worked with Credicorp Capital and Sura Asset Management to develop the fund to help pension funds and other large investors provide financing for infrastructure projects in Colombia. The engagement builds on IFC’s increasing role connecting institutional investors with opportunities to finance critically needed infrastructure projects in emerging markets.
IFC’s global experience and successful track-record in infrastructure finance was essential to attract investors. The fund is designed to allow pension funds to invest in infrastructure projects while ensuring the diversification and low volatility their portfolios require. This type of instrument will be critical as Colombia is embarking on an ambitious infrastructure program that will require about $24 billion in financing to upgrade its precarious network of roadways, which requires investments from the private sector.
“Colombia has started an ambitious road infrastructure development plan that requires large investments. We are firmly committed in contributing to boost financing for these large infrastructure projects that will doubtlessly contribute to Colombia’s development and improve its competitiveness,” said Andrés Castro, chief executive officer at Sura Asset Management.
The Fondo de Capital Privado 4G Credicorp Capital / SURA Asset Management fund will support the roll out of Colombia’s Fourth Generation (4G) road program, one of the most ambitious infrastructure packages under a public-private partnership framework in the world. The fund is also possible thanks to new regulations approved in Colombia designed specifically for broadening both the supply of capital for infrastructure development as well as the demand by pension funds for local, long-term, fixed income opportunities and diversification.
Pension funds, through these type of debt funds, will be able to invest in infrastructure projects while ensuring lower volatility returns and diversification benefits for the ultimate benefit of the pensioners.
“This investment will be instrumental in providing infrastructure finance and developing capital markets in Colombia,” said Carlos Leiria Pinto, IFC’s head for the Andean region. “The new fund will help address one of Colombia’s most crucial challenges and our investment reflects IFC’s focus on unlocking more financing for urgently-needed infrastructure upgrades in emerging markets,” he added.
The investment is the latest example of IFC’s commitment to Colombia’s infrastructure projects. Before this, IFC helped launch in 2014 Financiera de Desarrollo Nacional (FDN), a specialized finance institution that is playing a critical role in securing the financial resources needed for the country’s large-scale infrastructure projects, including the 4G program. IFC also advised the government of Colombia in how to structure the auctions of the 4G program.
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 also promotes access to finance for micro, small, and medium enterprises, and works on improving the investment climate by simplifying regulations and royalty management.
About IFC
IFC a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
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