IFC to finance $220 mn Colombian trade route upgrade

The BLB corridor connects the country’s interior with Buenaventura, Colombia’s largest port, which handles 44 per cent of the nation’s total trade. The investment is expected to significantly enhance connectivity, delivering travel time savings of 30 to 40 minutes and ensuring stability along a route that has historically suffered from disruptions due to inadequate maintenance. These improvements will directly support Colombia’s job creation, economic growth, regional integration, and competitiveness.

IFC’s proposed investment consists of approximately $220 million equivalent in COP. The total project financing package amounts to approximately $904 million, with the remaining resources provided by parallel lenders under IFC’s leadership for Environmental and Social (E&S) coordination over the performance standards. This transaction marks IFC’s first direct engagement with SACYR, a globally recognised infrastructure developer, and its third direct investment in a 4G/5G toll road in Colombia, IFC said in a press release.

A key innovation of this transaction is its structure as a Sustainability-Linked Loan (SLL). This is the first project finance SLL for a road concession in the region and the largest Project Finance facility in Colombia. An SLL is a financing instrument in which the loan’s terms are directly tied to the borrower’s achievement of ambitious, pre-defined sustainability performance targets, measured through Key Performance Indicators (KPIs). For this project, these KPIs focus on reducing absolute greenhouse gas emissions and increasing the share of women in the direct workforce, both during construction and operation.

“Congratulations to the team and thanks to the entities for their trust. This project is key to the development of the region and will bring important social benefits to the communities,” said Ignacio García, country director of Sacyr in Colombia.

“This loan marks a significant milestone for sustainable infrastructure in Colombia and the region. By structuring the financing as a sustainability-linked loan, IFC is not only mobilising long-term capital for a critical trade corridor but also setting new standards for environmental and social performance. We are proud to partner with SACYR and the government of Colombia to deliver tangible and sustainable economic development, job creation, and benefits for the regional economy and communities,” Cheryl Edleson Hanway, IFC regional industry director, said.

This investment demonstrates IFC’s commitment to sustainable infrastructure and private sector mobilisation in Colombia and the region, setting a new benchmark for future projects.

ALCHEMPro News Desk (RR)