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| Bogota Street Rehabilitation |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26473 |
| Company name | Bogota Distrito Capital |
| Country | Colombia |
| Sector | Other (For Non-Investment Projects) |
| Environmental category | B |
| Department | Sub-National Finance |
| Status | Pending Signing |
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| Date SPI disclosed | October 25, 2007 |
| Projected board date | November 29, 2007 |
| Previous Events | Approved: November 29, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project involves a $50 million senior loan to the metropolitan municipality of Bogota Distrito Capital, to finance part of its 2007-2008 capital expenditures program for and rehabilitation of the City’s urban streets network as well as incremental construction of sidewalks and walking/bike paths. The loan is part of a Bogotá’s borrowing plan for 2007 which includes, in addition to the proposed IFC loan, a $300 million international Peso-linked bond issue, and loans from multilateral development including a $50 million loan being processed by the Andean Development Corporation (CAF). It is expected that the IFC and CAF loans and about $50 million from the bond will be dedicated to street rehabilitation, with the rest of the proceeds used for other capital expenditure program. |
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| Project sponsor and major shareholders of project company |
Bogota, the capital and main economic center of Colombia, has a population of 7.3 million and contributes about a quarter of the country’s GDP. GDP per capita, estimated at $4,300 in 2006, is well above the country’s average of $3,255. The economy is diversified and no single sector is dominant.
Bogota is divided into 20 local wards, which focus on neighborhood-level infrastructure and community consultation. City-wide services, including the core street network, are administered by Bogota Distrito Capital, which also collects local taxes. BDC is governed by a legislative District Council, with an elected Mayor leading the executive branch.
BDC has steadily improved its performance since it emerged from a financial and service delivery crisis in the early 90s. The local issuer rating assigned by Duff and Phelps de Colombia is AAA, while the international foreign currency issuer ratings assigned by Fitch, S&P and Moody’s are the same as Colombia’s sovereign (BB+ / BB+ / Ba1, respectively). |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is an A loan of $50 million to help finance the 2007-2008 capital expenditures program for periodic maintenance and rehabilitation which is expected to cost approximately $160 million. |
| Location of project and description of site |
| Bogota, in the department of Cundinamarca, Colombia |
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| Anticipated development impact of the project |
Improved infrastructure:
Investments to be financed under the proposed project will contribute to economic growth and the competitiveness of the city’s businesses by improving the local infrastructure. The street rehabilitation investments will reduce vehicle operating costs; times spent in congestion and accidents, and extend the life of the city’s infrastructure. Given the high traffic density, earlier road rehabilitation programs financed by IBRD in Bogota achieved ERR above 30%.
Improved cash and debt management:
The proposed loan would better match the disbursement profile of the city’s capital expenditure program, while still providing terms and tenors appropriate for investment in infrastructure assets with long useful life. It will help improve the Bogota’s debt profile and reduce the risks associated with shorter-term borrowing alternatives. |
| IFC's expected development contribution |
| The IFC loan will help the city complement its capital market borrowings and optimize its overall debt profile by matching the timing of disbursement of funds with the cash needs of a complex investment program involving multiple rounds of procurement, while also obtaining tenors sufficient to match the useful life of the infrastructure assets. |
| Environmental and social issues - Category B |
| The project is a category B investment according to IFC’s Environmental and Social Review Procedure. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) disclosed through IFC’s external website. |
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| For inquiries about the project, contact: |
Rigoberto Lugo
Director de Crédito Público
Cra. 30 No. 24-90 Piso 2,
Bogota
+57-1-338-5356 (Telephone)
+57-1-338-5360 (Fax) |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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