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The Medellin-based “Vias del Nus” (“Vinus”) highway construction concessionaire announced January 22 that it won crucial permits from Agencia Nacional de Licencias Ambientales (ANLA) to build twin tunnels through “La Quiebra,” the principal obstacle blocking cost- and time-efficient freight traffic between Medellin and the Rio Magdalena.

The “Quiebra” pass currently only has an obsolete, narrow-gauge railway tunnel as well as a steep, winding highway nearby that snarls freight traffic.

According to the Vinus partners, the environmental permits from ANLA enable start-up of construction of the Quiebra highway tunnels (each 4.1-kilometers in length) as well as 5.1 kilometers of four-lane divided highway between Porcesito and the “Portal del Tunel” in Santiago, all in northern Antioquia.

“The objective of the Vias del Nus concession, which is part of the ‘Autopistas para la Prosperidad,’ is to generate a road interconnection between the city of Medellin and the main [fourth-generation] highway concessions in the country, as well as linking commercial exchange centers such as the Caribbean Coast, Pacific Coast as well as the Rio Magadalena,” according to the Vinus partners.

“This concession will allow easier and cheaper transport of products destined for export, in addition to favoring the entry of products from other regions to the department of Antioquia.

“Additionally, significant time savings will be achieved by having a design speed of 80 kilometers per hour for the new divided-highway roads and for the specific section of Cisneros-Alto de Dolores to the existing Magdalena-2 highway junction.

“Part of the work to be done consists of rehabilitating existing road and building a third lane on the uphill side of highway between San Jose del Nus and Alto de Dolores in order to improve the characteristics of the road and allow a better speed of operation than today,” according to the partners.

In total, the “Vias del Nus” project includes 154.7 kilometers of new and rehabilitated highway that begins in the northern Medellin suburb of Pradera, joining the existing Hatovial highway concession.

“Within this concession is the functional unit between Bello and Pradera that is currently concessioned to Hatovial and that will become part of the project from May 2, 2021,” according to the partners.

“This concession provides for the operation of five toll stations; four already existing in the corridor -- Niquía, Trapiche, Cabildo (Trapiche control toll station), Pandequeso -- and Cisneros, which will be moved because of the new geometry of the highway when the Quiebra tunnels enter into operation.

“To avoid the [potential] diversion of cargo traffic through the northeast route, it is expected that the Agencia Nacional de Infraestructura (ANI) and the Minstry of Transport or the government of Antioquia will issue a restriction upon cargo carriers for categories V, VI and VII on the Porcesito-La Cortada-Yolombó-Yalí-Vegachí-El Tigre-Remedios route (Northeast Trunk),” the Vinus partners added.

The Vinus concession partnership includes Mincivil S.A. (51.8%); SP Ingenieros (22.2%), Construcciones El Cóndor (21.1%); EDL (3.7%) and Latinco (1.1%).


Medellin-based Celsia – the electric-power division of corporate giant Grupo Argos – on January 26 reported full-year 2017 net profits of COP$251 billion (US$89 million), up 47% from COP$171 billion (US$61 million) in 2016.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$1.12 trillion (US$399 million) for full-year 2017, up 9% year-on-year -- an all-time record.

As for fourth-quarter (4Q) 2017, net profits dipped slightly, to COP$71 billion (US$25 million), down from COP$75 billion (US$27 million) in 4Q 2016. However, 4Q 2017 EBITDA rose 21% year-on-year.

Consolidated earnings for full-year 2017 dipped 18% year-on-year, to COP$3.1 trillion (US$1.1 billion) because of a decline in thermal-power generation and lower power prices in Colombia, the company explained. However, 4Q 2017 consolidated earnings rose 4% year-on-year.

Total power generation in Colombia for full-year 2017 totalled 5,226 gigawatt-hours (GWh), down from 5,596 GWh in 2016. However, 4Q 2017 generation rose 31% year-on-year thanks to heavier rainfall that enabled greater output at Celsia’s hydroelectric plants.

Celsia’s power operations in Central America generated 9% more income in 2017 versus 2016, hitting US$245 million.

Celsia president Ricardo Sierra added that the company is “very content” with its 2017 financial results, adding that Celsia is now a leader in development of solar-photovoltaic power arrays as well as photovoltaic roofs for commercial operators -- including the Compañia Nacional de Chocolates chocolate factory in Rionegro, just outside Medellin.

Meanwhile, Celsia hailed a recent decision by Colombia’s national power regulator (CREG) that has boosted the financial outlook for thermal power generation -- via a “marginal scarcity price” scheme that allows thermal power generators to tap special revenues mainly generated by hydropower operators. These special revenues enable thermal power generators to survive for months or years until called-upon to boost output during occasional droughts that sap Colombia’s overwhelmingly hydropower-dependent electrical grid.

The company also hailed the recent start-up of a natural gas regasification plant in Cartagena, enabling thermal power generators to tap liquefied natural gas (LNG) imports during periods of peak demand for gas in Colombia.


Inexmoda -- the Medellin-based national trade group for Colombia’s textile and fashion industry – announced January 25 that the 30th annual “Colombiatex” show here generated new business deals likely to top US$356 million, surpassing last year’s estimate of US$326 million.

In total, 36% of the dollar value of projected new-business deals here involved purchase of textiles; 28% involved machinery, 19% in feedstocks other than fibers; 10% in fibers, and 7% in “other” supplies.

In all, 22,653 people from 60 nations attended this year’s version of Colombiatex – up 3% year-on-year – among which were 14,023 commercial buyers, 13% of those international. Among the internationals, 28% came from Ecuador; 10% from Mexico and 8% from the USA.

During the three-day event (January 23-25), Colombiatex once again cemented its position among Latin America’s leading textile-industry trade shows -- with growing evidence of renewed industry optimism this year, following a difficult 2017, when Colombian consumers were hit by higher retail value-added (IVA) taxes and an economic slow-down, as noted in a closing press conference by Inexmoda president Carlos Eduardo Botero.

This year’s show over-flowed the entire Plaza Mayor inside-space capacity, spilling into tented staging-areas adjacent -- resulting in more-than 12,000 square meters of commercial show area for the 579 exhibitors from 22 countries.

Brazil – which in December 2017 approved a two-way, free-trade agreement with Colombia, eliminating duties on textiles and clothing -- led the field in international exhibitors (21%), with India second (19%) and Spain third (10%), according to Inexmoda.

“The Colombiatex model gives us a very positive cost-benefit and the [participating] companies are very satisfied, especially given the new agreement between Mercosur nations [Brazil, Paraguay, Uruguay, Argentina] and Colombia, which stimulates bilateral trade relations,” added Rafael Cervone, executive director of the Texbrasil textile promotional group.

In addition to the surging crowds and bigger buying deals, Colombiatex also hosted 21 lectures on industrial, technical, social, environmental, marketing and fashion trends -- organized by Medellin’s Universidad Pontificia Bolivariana (UPB) and attended by 7,300 in-person, plus another 6,700 via internet streaming to international audiences, thanks to live broadcasts by local TV station Telemedellin.

Another nine “trends-forum” sessions here attracted 1,038 attendees for special insights into textile and fashion concepts, while 10 other workshops examined emerging challenges facing textile and clothing manufacturers.

Meanwhile, a concurrent “fashion system business roundtable” organized by the Mayor of Medellin and business-promotion agency ProColombia brought-together 161 local exporters and 85 international buyers, generating an estimated US$9 million in additional business deals.

Yet another new feature to this year’s edition of Colombiatex included 32 independent graphic and visual artists who showed their designs and explained the latest technical trends in graphics, colors and textures. Meanwhile, “Denim Day” demonstrations -- now a leading feature at Colombiatex -- showed the latest innovations in design and manufacture in jeans-wear.

Finally, according to figures provided by the Medellin Mayor’s office, each foreign attendee to Colombiatex this year was estimated to have spent (on average) about COP$2,416,320 (US$858) per day in hotel, meals, transport and other expenses, with a net economic benefit to the city of about US$12 million.


Medellin-based multinational electric-power giant EPM announced January 19 the start-up of a 590 megawatt-hours/year (MWh/year) solar-voltaic power system for the “El Tesoro” shopping mall in the Poblado district.

The photovoltaic system will operate in parallel with conventional grid power (overwhelmingly hydroelectric-sourced), according to EPM.

It’s EPM’s first-ever such system installed and financed for commercial customers, under a 15-year contract deal, according to the company, whose sole owner is the municipality of Medellin.

According to EPM general manager Jorge Londoño de la Cuesta, the new system includes 1,568 solar panels, covering a roof area of 2,570 square meters and supplying power mainly to the common areas of the shopping center.

With the new system, “we expect to generate approximately 590 MWh annually, equivalent to the power consumption of approximately 341 homes,” de la Cuesta said.

El Tesoro general manager Adriana González Zapata added that the new system “will bring great benefits – economically, because it will substitute for about 24% of [grid power], and environmentally, as part of our commitment to reduce our carbón footprint.”

The solar-power system will have dispatch priority in power supply, with grid-power serving as backup.

EPM’s 40.9%-owned “Erco Energia” affiliate built and installed the system and will provide maintenance. EPM now can offer similar systems to commercial customers that have “ample” space for photovoltaic panels, the company added.

EPM will assume the up-front cost of the system as well as handle installation, operation and maintenance. The company will recoup its investment via long-term contracts at “stable” and “competitive” prices per kilowatt-hour -- paired with conventional grid energy supply to ensure constant, reliable power, according to EPM.

Companies employing such solar-power systems can now claim credits as socially responsible entrerprises (“Responsabilidad Social Empresarial,” RSE), and also can get real-time reports on solar power use, according to the company.

The solar-power system EPM is offering doesn’t employ battery storage, but rather is custom-designed for each customer’s power profile, according to the company.

For each 100 kilowatts of newly installed solar power capacity, a commercial company could claim an annual reduction of 28 tonnes of carbon dioxide (CO2) emissions, equivalent to the typical CO2 footprint of 81 homes, according to EPM.


Medellin business-development agency Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana (ACI) announced January 19 that Switzerland-based multinational consultant Amaris plans to expand its Colombian and South American operations following start-up of new offices at Medellin’s “Ruta N” high-tech hosting center.

“Teamwork between ACI Medellín, Ruta N and ProColombia, managed to consolidate the presence of this company in the country,” according to ACI.

Amaris – now operating through 65 offices in 50 countries, with some 700 corporate clients – chose Medellin for expansion because of the “innovative environment offered by the city and its strategic geographical location to support its other offices in the provision of recruitment services, human resources, administration, finance and technical support,” according to ACI.

“Ruta N offered us a pleasant work environment,” added Sara Mondragón, platform manager at Amaris Medellin. “Thanks to the other [high-tech] companies installed [here], we are surrounded by an innovative and challenging environment. We constantly interact with the members of other foreign companies that are part of the Ruta N ecosystem” and “we see an excellent opportunity to benefit from their knowledge of the Colombian market.

“To make this decision we made an analysis of the environment and the quality of life in Latin America. Medellín was the best decision [considering] cost, safety, quality of life, institutional support and human talent,” Mondragón concluded.

Amaris -- founded in Switzerland in 2007 -- specializes in business-administration consulting, information technology, telecommunications, engineering, biotech and pharmaceutical sectors.

“With a turnover of €187 million [US$228 million], its goal in 2018 is to reach a team of 5,000 employees -- currently amounting to 3,650 -- and thus ratify itself as a world leader in independent consulting,” according to the company.


The latest study by Medellin-based XM – Colombia’s national power-grid operator and wholesale power-trading center – finds that demand for electric power in Antioquia slipped by 0.8% year-on-year during full-year 2017, while nationwide power demand actually rose 1.3%.

Nationwide power demand in 2017 totaled 66,893 gigawatt-hours, the study found.

Power demand growth in 2017 was relatively strong compared to 2016, when demand rose just 0.2% year-on-year, XM revealed in a report issued January 17.

Strongest power-demand-growth in 2017 occurred in the Atlantic Coast (up 3.8%) and in Guaviare (up 2.4%), XM found.

Nationwide power demand growth for the month of December 2017 rose 3.2% year-on-year, the study found. Residential and small-business power demand rose 4.1% year-on-year in December 2017, but industrial-commercial demand rose by just 1.1%, the study found.


The latest monthly survey of leading banks and financial firms by Colombia’s Banco de la Republica (the national bank) finds that the Colombian peso is likely to trade in a range of COP$2,800 to COP$3,200 per US$1 during 2018, with a foreseen average of COP$2,995/US$1 by year-end.

The monthly survey (see: http://www.banrep.gov.co/es/informe-estadisticas-monetarias-y-cambiarias) of 40 leading private banks, stock analysts, pension funds and international organizations also sees the COP/US dollar trading in roughly the same ranges through 2019 and 2020.

Severe cold weather in the northern hemisphere in recent weeks has boosted global energy demand, with the result that rising oil prices -- traded in US dollars -- habitually weaken relative values of the US dollar against other currencies, including the Colombian peso.

As a result, the Colombian peso has been trading below COP$2,900/US$1 in the last couple of weeks, down from more than COP$3,000/US$1 during several days in Decemeber 2017.

The same survey also found that full-year 2018 inflation is likely to come-in at around 3.47%, with full-year 2019 inflation seen at around 3.33%.

Gross domestic product (“PIB” in Spanish initials) is seen growing by 2.45% this year, according to the average forecast of the surveyed analysts.


In a new study released January 15, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) finds that Colombia’s gross domestic product (GDP) is likely to rebound to 2.6% growth in 2018, up from 1.8% in 2017.

“GDP is projected to expand by 2.6% in 2018 against a backdrop of lower interest rates, higher oil prices and an expected improvement in the performance of the economies of the United States and the Euro area,” the latter two areas being key Colombian export markets, according to the study.

 During 2017, Colombia’s domestic demand slipped, pinching GDP growth. However, “there are some indications that the slowdown may have now bottomed out and that the growth rate will have begun to pick up [since] the third quarter of 2017,” according to ECLAC.

Meanwhile, “the upturn in international mineral and oil prices [during 2017] helped to bring down the deficit on the goods account as the value of fuel exports strengthened,” the study noted.

“Foreign direct investment (FDI), although weaker than the year before, and portfolio investment were the two categories of inflows that made the biggest contributions to the financial account in the first half of 2017,” according to ECLAC.

On a related front, “gross fixed capital formation rose slightly thanks to an acceleration of investment in civil works, agricultural facilities and transport equipment. Investment in construction slumped, however. Government consumption climbed at a rate of 3.5%.

“Growth was driven by the agricultural sector –with coffee production and other crops leading the way– and by sectors associated with social, personal and financial services,” the study noted.

On the other hand, “the construction sector was hurt by weaker building demand and by contractual problems that delayed the closing of the financial packages for the 4G [fourth-generation] road infrastructure program.

“The mining sector continued to decline, although there were some faint signs of a recovery thanks to an upturn in prices,” ECLAC added.

Fedesarollo Predicts 2.4% Rise in GDP

Meanwhile, Fedesarollo -- Colombia’s leading economic think-tank – on January 12 released its latest Tendencia Económica (economic trends) report, finding that national GDP is likely to grow by 2.4% this year.

Fedesarollo also noted that Wall Street bond rater Standard & Poor’s last month cut its rating on Colombia’s sovereign debt to "BBB-", down from a prior "BBB" rating, although maintaining a “stable” outlook. “The decision by S&P highlights the fiscal challenges over the mid-term,” Fedesarollo’s report noted.

Although federal tax collections in 2017 were “weak,” Colombia’s fiscal goals were met thanks to a COP$4 trillion (US$1.4 billion) cut in government spending along with a one-time fiscal gain from massive fines imposed upon cell-phone companies accused of price-rigging, the study found.

However, such one-time gains aren’t in the cards in future years, so the government must take further steps to maintain its fiscal targets, Fedesarollo added.

Meanwhile, the most recent economic indicators show that Colombia’s full-year 2017 GDP growth likely finished at around 1.7%, while latest GDP forecasts for 2018 indicate a likely rebound to around 2.4% growth, the study noted.


Medellin-based multinational power giant EPM announced December 29 that it won a US$1 billion credit from the Interamerican Development Bank (IDB) “Invest” funding subsidiary for debt finance of its 2.4-gigawatt, US$5 billion “Hidroituango” hydroelectric project in Antioquia.

The credit package includes payback terms of eight-to-12 years. Draws would take place during a four-year period, virtually completing 100% of Hidroituango project finance, according to EPM.

Commenting on the deal, EPM general manager Jorge Londoño de la Cuesta said the finance package is of “profound significance” for the company as it ensures broader funding diversity.

As a result of the latest deal, 36% of Hidroituango finance will come from EPM’s own resources with the other 64% from debt sources.

Winning IDB backing not only represents debt diversification but also means that major international lenders fully recognize EPM’s technical, social, environmental and financial capacity, he added.

The US$1 billion package includes US$50 million from the Chinese government, US$300 million from IDB and US$650 million from private international banks including Sumitomo Mitsui, BNP Paribas, BBVA, Banco Santander, CDPB, KFW PEX and ICBC, according to EPM.

The Hidroituango project is now 80% complete with the first 300 megawatts of power output scheduled to start at year-end 2018, according to the company.

EPM is 100% owned by the city of Medellin and now operates throughout Colombia, Guatemala, El Salvador, Panamá, Chile and México, providing electric power, natural gas, drinking water and sewage treatment systems.


 

Medellin Mayor Federico Gutierrez and Antioquia Governor Luis Perez jointly announced December 18 that the 9.8-kilometers-long “Toyo” tunnel project has now won required environmental licenses, paving the way for construction start-up in January 2018.

The “Toyo” tunnel project – estimated to cost COP$1.83 trillion (US$617 million) in 2012 pesos -- would link the new “Mar 1” and “Mar 2” highway projects together, dramatically improving Medellin’s highway connections to current and future Atlantic freight ports.

Colombia’s environmental licensing agency (Autoridad Nacional de Licencias Ambientales, ANLA) had demanded several changes to the project prior to giving final approval, according to the joint press statement.

The Antioquia department is putting-up COP$780 billion (US$263 million), while the city of Medellin is adding COP$520 billion (US$175 million) and the “INVIAS” national highway agency adds another COP$530 billion (US$174 million) to the project.

The project also includes 18 smaller tunnels of 18 kilometers total, 30 bridges totaling 3 kilometers in length, and 16.9 kilometers of surface highway.

INVIAS has already contracted to the Antioquia government the first section (“Tramo I”) of the project, expected to last six years and cost COP$1.045 trillion (US$352 million) in 2015 pesos. This section includes road works between Santa Fe de Antioquia and Cañasgordas, passing underneath the municipality of Giraldo.

INVIAS aims to award the second section (“Tramo II”) in 2018, according to the joint press statement.

Mayor Gutiérrez added that the project not only will make Medellin industries more competitive, but also will contribute to development of the long-neglected Uraba región of Antioquia.

Environmental licenses include special protective measures for highway sections between Cañasgordas and Buenos Aires; between Pinguro and Las Habas; between Buenos Aires and El Madero; and between Manglar and Giraldo, according to the agency.

Licenses also include provisions for 17 other bridges not authorized earlier; permits for air pollutant emissions; and permits for proper disposal of extracted rocks and dirt.


Page 7 of 34

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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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