IFC Facilitates $176M Financing Package to Recaudo Bogota to Overhaul Bogota’s Transit System
November 15, 2012—IFC is facilitating a $176 million financing package to Recaudo Bogota S.A.S to develop and operate the fare collection, fleet management, and real-time information technology system for Bogota’s bus Integrated Public Transportation System (SITP). The financing will improve the Colombian capital’s capacity to manage its large transportation needs, helping serve 6 million bus passengers daily and making public transportation more affordable and convenient in Latin America’s sixth largest city. It will also create 2,500 new jobs.
IFC is providing a 12-year loan of $55 million in Colombian pesos and Korea Exim Bank (KEXIM) is providing $62 million, and will guarantee a $59 million commercial bank loan facility provided by HSBC, Shinhan Bank, and Woori Bank.
Recaudo Bogota is a newly created company that won a concession contract from the City of Bogota in 2011 to manage the program for 16 years. The loan package will allow Recaudo Bogota to more effectively coordinate a complex system of over 12,000 buses running 500-plus routes operated by 13 companies.
The international financing package is the largest in the history of Bogota’s public transportation. It is also IFC’s first loan to a transport payment system, drawing on IFC’s expertise in both public transit and electronic payment sectors. It will enable Recaudo Bogota, among other things, to introduce an easy-to-use electronic-payment mechanism using smartcards that will eliminate cash from the system, increasing security and efficiency. The company will distribute 2.7 million smartcards for free to low-income people.
“We are proud to have IFC as a long-term financial partner,” said Pedro Ruano, President of the Board of Directors of Recaudo Bogota. “With the loan comes great added value: An experienced team whose advice and commitment will be of great significance. IFC has been instrumental in facilitating a financial partnership where multilateral and Korean public and private banks work hand-in-hand with Korean and regional private companies to positively impact the vast majority of Bogota’s population.”
LG CNS, a Korean services company and subsidiary of the LG Group, will be responsible for providing the most advanced information technology solutions of its kind to Recaudo Bogota, representing Korea’s largest ever information-technology services export. This will leverage the technology implemented in Seoul’s public transport system to develop a custom solution that meets Bogota’s fare collection, fleet management, and user-information needs.
“With this financing, IFC shows its commitment to continue supporting the effective participation of private sector players in improving public services in Colombia, in particular public transportation that benefits the quality of life of millions of people,” said Bernard Sheahan, IFC Vice President for Latin America and the Caribbean, Sub-Saharan Africa and Western Europe. “We are proud to partner with Recaudo Bogota, a company with the necessary technology and operational experience to succeed.”