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Paving the Way to Progress in Colombia

Perimetral Oriental de Bogotà

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Investment summary
Client

Perimetral Oriental de Bogotá

Country

Colombia Colombia

Tenor

Up to 22 years

A-Loan

$156 million

Total projet cost

$788.4 million

Year of Closing

2016

Project Description

A major highway improvement project in the department of Cundinamarca will reduce travel time on the eastern and northeastern outskirts of Bogotá and provide more efficient connections to bypass the congested metropolitan area. The project, which covers a 154-kilometer (96-mile) route from Sesquilé to Cáqueza, involves widening and upgrading existing road, as well as building five kilometers of new highway and eight small bridges.

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In addition to generating 1,500 jobs during construction and 250 jobs during operation, the project will benefit around 300,000 area residents by enhancing road safety and reducing traffic jams.

Motorists will be able to drive between the departments of Boyacá and Meta without going through the capital city. The improved route is also expected to bring new opportunities for business growth and tourism to several towns east of the Eastern Range of the Andes.

This project—scheduled for completion in early 2019—shows how public-private partnerships (PPPs) can help drive investment in infrastructure. IDB Invest led the financial structuring of the project and contributed a long-term loan of $156 million to Perimetral Oriental de Bogotá S.A., the private consortium that was awarded the contract. Banco Corpbanca, Bancolombia and Financiera de Desarrollo Nacional have also provided financing.

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This is one of the first projects implemented under the Colombian government’s Fourth Generation Road Concessions (4G) program, which seeks to eventually invest some $24 billion through PPPs to create a nationwide network of toll roads.

Such is the scale of the 4G program that once it is completed, it is expected to increase GDP by 1.5 percent per year. The IDB Group has worked with the Colombian government to address financial, environmental and social issues associated with the program and improve road safety.

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This is part of a nationwide road improvement program expected to increase Colombia’s GDP by 1.5 percent per year.