• The social bond will back up investment for the Rumichaca-Pasto Toll Highway project in Colombia

• It is an innovative, long-term solution in local currency that mobilizes institutional investors to refinance the project through international capital markets.
• The project, of great social impact, will reduce travel times and transportation costs, directly impacting the inhabitants of the seven municipalities that make up the road corridor.

IDB Invest has acted as anchor investor for a global social bond, with an investment of $135 million equivalent in Colombian pesos. The bond has been issued by the Unión del Sur Autonomous Trust, in order to support the investment for the Rumichaca-Pasto road concession project in Colombia. IDB Invest plays a key role in this transaction by supporting an innovative long-term solution in local currency to refinance part of the project through international capital markets and mobilize institutional investors who prioritize social impact investments.

The issue, denominated in inflation-linked UVR, was made for a 19-year term and reached a total value equivalent to $262 million, this being the largest social bond of its kind in the region for an infrastructure project. The bond also includes a tranche of $278 million and another in Colombian pesos for $260 million in commercial loans, adding up to a total financing of $800 million.

With this deal, IDB Invest participates for the first time in a bond issue under rule 144 A/Reg. S, creating a relevant precedent with a potential replicability effect in future public offerings of bond issues, promoting the development of impact investments and attracting new institutional investors to the infrastructure sector in Latin America, thus helping to close the financing gap in this sector.

The Rumichaca-Pasto Toll Highway, operated by the Concesionaria Vial Unión del Sur S.A.S. (CVUS) covers 83 kilometers of highways that connect Pasto in southern Colombia, with the Rumichaca bridge on the border with Ecuador. The civil works of the project are in their final phase and the construction is expected to be completed by the first half of 2022.

As part of the bond issuance process, IDB Invest has collaborated in the design of the methodological framework for the use of funds, which contains the criteria for the selection, monitoring and evaluation of projects, aligned with the principles of social bonds of the International Association of Markets of Capitals (ICMA).

The project has obtained an independent verification of the methodological framework, known as a second-party opinion, issued by Vigeo Eiris (V.E.), one of the most prestigious external consultants to validate this type of project. Among other factors, the positive impact that the project generates in the communities located in the area of ​​influence of the project through the funds obtained from the issue is assessed.

As a complement to this operation, IDB Invest will provide advisory services to Sacyr Concesiones Colombia to develop a plan to support diversity and inclusion and close gaps in this area at the corporate level. To do this, it will carry out a diagnosis of gender gaps with the support of the Women's Empowerment Principles (WEP) tool.

The project will reduce travel times and transportation costs, directly impacting the inhabitants of the seven municipalities that make up the road corridor: Ipiales, Contadero, Iles, Imués, Tangua, Yacuanquer and Pasto. Likewise, the surrounding community has benefited from the execution of various socio-environmental programs, among which are education and training sessions, tree planting, support for productive projects, entrepreneurship and health brigades, among others.

This transaction is expected to contribute to four United Nations Sustainable Development Goals (SDGs): no poverty (SDG 1), decent work and economic growth (SDG 8), industry, innovation and infrastructure (SDG 9) and reduction of inequalities (SDG 10).

About IDB Invest

IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

About Concesionaria Vial Unión del Sur

Concesionaria Vial Unión del Sur S.A.S. (CVUS) is the concessionaire responsible for the Concession Contract to develop the Rumichaca-Pasto road project. CVUS is owned by Sacyr Concesiones Colombia S.A.S., Sudamericana Integral de Construcciones - Colombia S.A.S, Sacyr Concesiones Participada I S.L. and Caneybi Corp. S.A. The Unión del Sur Autonomous Trust Trust is a trust organized under the laws of Colombia in accordance with the requirements of the concession contract.