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Medellin-based multinational utilities giant EPM announced July 28 that its first half (1H) 2020 net income fell 45% year-on-year, to COP$717 billion (US$192 million).

“In the first half of 2020 -- globally impacted by the coronavirus pandemic (Covid-19), which has implied significant financial challenges for the organization -- the EPM Group’s revenues amounted to COP$9.3 trillion (US$2.5 billion), with growth of 6% compared to the year before,” according to the company.

Operating income fell 7% year-on-year, to COP$2.1 trillion (US$564 million), while operating income margins fell 23%.

Earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 4%, to COP$2.8 trillion (US$752 million), according to the company

Through first-half 2020, EPM transferred COP$1.044 trillion (US$280 million) to the city of Medellin, its sole shareholder. EPM profit transfers routinely account for nearly 25% of the Medellin’s municipal budget revenues.

Net results for 1H 2020 “were impacted by lower cash receipts and higher costs in the provision of services, due to the effects caused by the prolonged dry season and low hydrology in Colombia,” which affected the company’s hydroelectric power sales.

“Lower [power] demand associated with lower economic activity -- as a consequence of the coronavirus pandemic (Covid-19) -- and cost overruns due to the special measures implemented by EPM during mandatory preventive isolation in the country had a combined [negative] effect on the company, totaling approximately COP$320 billion (US$86 million),” according to EPM.

“To this is added a net accounting expense for a [Colombia peso to U.S. dollar] exchange difference of COP$723 billion (US$194 million), as a result of a restatement of the debt in dollars associated with the accumulated 14.7% devaluation of the Colombian peso.”

However, in the second quarter of 2020, EPM recouped some of the currency-exchange losses suffered in the first quarter. As a result, the company recorded a reversal of COP$612 billion (US$164 million) in prior expenses for exchange differences, “given the revaluation of the Colombian peso during the second quarter of 2020,” according to EPM.

During 1H 2020, EPM Group invested COP$1.2 trillion (US$322 million) in infrastructure.

As of July 2020, the business group totaled 14,046 employees.

Extra Cost Impacts from Covid-19

To help the poorer populations in Colombia during Covid-19 crisis, the national government ordered all utilities to slash the cost of power, water, sewer and natural-gas services and enable interest-free deferrals on repayment for “strata 1 and 2” groups.

In total, such mandatory cuts in revenue cost EPM at least US$104 million.

In addition, EPM contributed COP$3.2 billion (US$859,000) to outfit Covid-19 intensive care units (ICUs) at the University IPS hospital at the University of Antioquia. Likewise, the company allocated COP$1.21 billion (US$325,000) for the acquisition of Covid-19 biosecurity protective clothing.

Hidroituango Hydroelectric Budget Rises

On another front, EPM’s Board of Directors announced July 28 that the 2.4-gigawatt “Hidroituango” hydroelectric project in Antioquia is now estimated to cost at least COP$16.2 trillion (US$4.35 billion) -- 5.88% higher than the prior estimate – “as part of the approval process for future terms” of the over-all budget.

According to EPM, latest variations in the project budget include:

“• Increase in the costs of machine house and pipeline works; injections to contain infiltrations of water and consolidation of the massif of the southern zone (units 5 to 8, second stage); improvements to the left-margin alternative road approach; filters, dam drains and instrumentation; lining of galleries; and construction and shielding of tunnels to enable intermediate discharges.

“• Construction of vertical wells in units 5 to 8 that correspond to the southern zone or second stage of the project.

“• Update of the macroeconomic scenario, considering the impact of the increase in the representative market rate (TRM) of the Colombian peso to U.S. dollar.

“• A lower net value of the investments [including] equipment and civil works written off” because of the April 2018 diversion-tunnel collapse and resulting damage to the machine room.

“As of June 30, 2020, the value invested in the project amounts to COP$11.8 trillion (US$3.2 billion),” according to EPM.

“In addition, efforts leading to obtaining compensation payments from insurance companies continue, with which we expect to cover a significant part of the costs of recovering the affected works of the project. To date, US$150 million has been received,” according to the company.

EPM estimates that Hidroituango power-generation units 1 to 4 (first stage) will start operating in 2022, “fulfilling the obligations assigned by the national Energy and Gas Regulation Commission (CREG), in auctions for power-reliability charges in which the project has participated,” according to the company. “Units 5 to 8 (second stage) are scheduled to enter from 2024.”

However, “as new impacts or changes in the current situation are analyzed, both due to the Coronavirus pandemic and other circumstances that may be registered, they will be incorporated into the schedule and new possible entry-into-service scenarios will be established,” the company added.

Covid-19 infections among hundreds of workers at Hidroituango have already resulted in delaying start-up of the first power generation units to 2022, rather than the earlier estimate of December 2021.

Former Medellin Mayor Federico Gutiérrez (2016-2019) once again is helping to move Medellin into the limelight via an interview published in the latest edition of the International Monetary Fund (IMF) Finance & Development monthly magazine.

The former Mayor – now a national political commentator and seen as a likely pre-candidate for Colombia’s Presidential elections in 2022 – enjoyed a well-recognized reputation here as an unpretentious, transparent, bright and exuberant person who was happiest -- often actually joyous -- when meeting and listening to ordinary citizens, especially when walking around Medellin’s poorest neighborhoods.

Yet Gutiérrez – a soft-spoken, political moderate – simultaneously was just as comfortable dealing with the city’s business-sector movers-and-shakers -- and he showed notable facility in intellectual debates on public policy, economic issues and consensus-making.

Below is the IMF interview published in its entirety:

Former Mayor Federico Gutiérrez Discusses how Prioritizing Security and Sustainability Paved the Way for a 21st Century City
Volume 57, Number 2
International Monetary Fund Finance & Development (F&D) In The Trenches

In 1991, Medellín, Colombia’s second-largest urban area, was the world’s most violent city. Today, the “City of Eternal Spring” is internationally recognized as one of the most innovative, inclusive, and sustainable cities in the world.

Federico Gutiérrez, born in Medellín in 1974 at the advent of Colombia’s violent period of armed conflict, was the city’s mayor from January 2016 until January 2020—helping spearhead many efforts to cement the city’s future as one of peace and prosperity. He credits the determination and unity shown by the people of Medellín for their commitment to overcoming violence and conflict, which has won their city accolades and admiration.

Speaking with Finance & Development’s (F&D) Marjorie Henríquez for our latest issue of F&D, Gutiérrez shares his thoughts on the city’s remarkable transformation over the past three decades.

F&D: What was the turning point for Medellín?

Gutierrez: In the 1980s and 1990s our society hit rock bottom with the tragedy of narcoterrorism. In 1991 we recorded a homicide rate of 381 murders per 100,000 inhabitants. Today the rate is approximately 20 per 100,000 inhabitants -- a 95% decrease. Although the only acceptable figure is zero, we have achieved significant progress in curbing violence and ensuring respect for life.

As to whether there was a specific turning point, that is complicated and open to debate. Ever since businesspeople decided to stay in Medellín in the 1980s and 1990s -- not giving in to the violence -- we began to develop a vital strategy rooted in teamwork. The business fabric of our city is extremely solid, and this can be explained to a great extent by the difficulties that the private sector had to face in order to survive. In the midst of violence, staying was a great act of bravery.

There were no shortcuts, but there were practical solutions. One of the latter involved partnerships between the public sector, private sector, academia, and civil society. Teamwork as a society was a determining factor in the city’s social transformation. The mafia upended our values: it turned hard and honest work into easy money, sobriety into opulence and, worst of all, it took the value out of life and instead put a price on it. Though we still have a long way to go, we have started recovering such values as life, respect, and freedom.

In fewer than three decades, Medellín has become a benchmark for the world. It is a socially innovative city that is today an affiliate center for the Fourth Industrial Revolution for Latin America, in partnership with the World Economic Forum. Experiencing the worst things possible as a society has made us stronger and more resilient. Medellín is a city that acknowledges its past, takes pride in its present, and above all, views its future optimistically.

F&D: As mayor, what were your key priorities?

Gutierrez: A government’s priorities must, in some way, be the priorities of the people. For us, they were education, security, and sustainability.

We had the highest education budget in Medellín’s history. With one of the flagship programs, we managed to return more than 8,000 children who were outside the educational system for various reasons to the classrooms. We also gave more than 43,000 scholarships for higher education. That is the best strategy for security in the long term—giving opportunities to succeed within the framework of legality.

On security, we dealt forceful blows to structures that had been operating for decades. The security issue is still quite complex. There is criminality, but it is much quieter than that of the cartels of the 1980s and 1990s. Our approach involves more than police strategies—it is a comprehensive model that provides opportunities and builds trust, fights crime, and focuses on strategic social investment by the state where there had previously been a vacuum, allowing lawlessness to prevail.

On sustainability, the first thing we did was to put air quality on the city’s agenda. Due to Medellín’s topography and winds, air quality decreases significantly twice a year: March and October. Institutions had the data on this for years without sharing it with the public. People thought smog was haze. We started by openly recognizing the problem. Then we set out to become Latin America’s capital of sustainable mobility: we added 65 electric buses to the city’s fleet, and the older buses were renovated with clean technologies.

New Metrocables (the city’s gondola lift system), 80 kilometers of new bike paths, and more sidewalks. We finished the technical, legal, and financial structuring of a new tram in the western part of the city. We also started a pilot of 100% electric taxis. I am an advocate of public transportation. Few things are more democratic than a good public space and a good system of mass public transport.

We also created 36 green corridors that open up the most congested roads in the city, and we planted more than 890,000 trees.

F&D: Describe some of Medellín’s most innovative achievements.

Gutierrez: Some call what has happened here ‘The Medellín miracle.’ But this was no miracle. It reflects many years of hard work.

For example, with the help of the business sector, we launched ‘Weaving Homes’ (Tejiendo Hogares), a commitment to building social fabric through training in positive discipline for families.

We understood that it was useless to have the best neighborhood infrastructure if what happened inside homes included violence against women and children.

We also launched Medellín Embraces Its History (Medellín abraza su historia) to memorialize the fight for the culture of legality, which included an upgrade to the House of Memory Museum, filming documentaries, and demolishing the Monaco building -- Pablo Escobar’s former residence -- to create space for a memorial park honoring narcoterrorism victims. We also created Parceros -- “Buddies” -- a program focused on recovering young people from criminal activity.

We have built an institutional framework to support social investment. Successive administrations have given continuity to city projects with the understanding that things do not simply start afresh every four years with an election.

F&D: How did you ensure that Medellín stayed on track?

Gutierrez: Medellín’s success is based on its people and shared trust. The long-term process of rebuilding the city is a collective endeavor. Nobody succeeds in isolation.

The first step was to acknowledge results achieved in the past, continuing but also building on them, bearing in mind that a leader’s time in office is short. We improved the quality of life, as shown by the fact that we have reached our highest point in the multidimensional quality of life index.

We invested resources efficiently and transparently where needed—not where we would have garnered the most votes. We took action in areas where the city continues to reap benefits even today: fighting crime and standing up for law and order, raising awareness about the environment and air quality, curbing the school dropout rate, making a bid to become a Latin American champion for sustainable mobility, and showcasing Medellín as an affiliate center for the fourth industrial revolution.

F&D: How did you learn about the people’s needs?

Gutierrez: For years I walked the streets of Medellín, talking to people even before I became mayor. As a leader, you must know how to listen, put yourself in somebody else’s shoes, and understand their daily struggles.

Colombia-based cement/concrete giant Cemex LatAm Holdings announced July 27 that its second quarter (2Q) 2020 net income rose to US$11 million, up from a net loss of US$4 million in 2Q 2019.

The profit boost came despite a 36% drop in sales and a 32% decline in earnings before interest, taxes, depreciation and amortization (EBITDA), according to the company.

“However, the operating flow margin was higher by 1.4 percentage points due to a proactive cost containment plan in all of our businesses and geographies” during the Covid-19 crisis, according to the company.

While EBITDA income declined, EBITDA margin improved by 1.4 percentage points, to 19.7%, “mainly due to a proactive cost control plan,” according to Cemex.

While 2Q cement volumes fell 33% year-on-year, “volumes recovered significantly in June, doubling the volumes sold during April [2020],” according to the company.

“Quarterly consolidated cement prices improved by 4%, compared to the same period of the previous year, and they remained stable sequentially, in terms of local currency.

Cemex LatAm also generated US$25 million of free cash flow and reduced its net debt by US$28 million during the latest quarter.

Commenting on the results, company general director Jesús González added: “With the support of our health and safety culture, as well as our more than 50 biosafety protocols, we are executing our operations safely and effectively in a Covid-19 world.

“Despite the fact that our volumes were significantly impacted by the measures to contain the pandemic, we reacted quickly and made significant achievements in the second quarter,” he added.

In Colombia, EBITDA fell 32% year-on-year, to US$12 million. Net sales decreased 45% to US$67 million as measured in dollar terms, and down 36% in local Colombian peso terms.

However, “fourth generation” highway construction projects were restarted during the latest quarter. As a result, “we expect the industry’s demand for concrete to reach 1.2 million cubic meters during 2020, 50% higher compared to 2019,” according to Cemex.

“In Bogotá, projects already awarded should start soon, such as three hospitals, Transmilenio [mass transit system] extensions and a water treatment plant. ‘Regiotram’ metro and train projects should start consuming cement next year

“For 2021, the [national] government is proposing a 10% increase, compared to 2020, in the physical investment budget, including road infrastructure, water plants, housing, among others,” the company added.

In Colombia’s residential, industrial and commercial sectors, “demand for cement from the self-construction sector recovered significantly during June,” according to Cemex.

As for the residential housing sector, “we are encouraged by the government’s announcement of 200,000 subsidies for new low- and middle-income housing in the next two years.”

On the other hand, “recent trends, such as telecommuting, restricted travel, and increased online shopping, could reduce demand for offices, hotels, and retail spaces,” the company added.

As for Panama operations, net sales fell 86% year-on-year, to US$7 million, according to the company.

In Costa Rica, EBITDA fell 27% year-on-year, to US$7 million. Net sales fell 26%, to US$20 million.

In the rest-of-Cemex LatAm markets (including Nicaragua, El Salvador and Guatemala), EBITDA increased 29% in dollar terms or 31% in local currency terms, to US$20 million for 2Q 2020. “Quarterly net sales reached US$56 million, an increase of 1% in local currency terms or stable in dollar terms,” according to the company.

Antioquia Acting Governor Fernando Suarez announced August 4 via his Twitter account that he has now recovered from Covid-19 infection and released from hospital.

Last week, the governor had suffered a "decrease in respiratory capacity as a result of the contagion with Covid and was preventively admitted to general hospitalization,” according to a press bulletin from the Antioquia departmental government.

However, more than 14 days have passed since the initial infection, and having overcome all prior symptoms, doctors have now declared Suarez "Covid-free," he said.

Earlier, Medellin Mayor Daniel Quintero had announced July 28 that following a July 24 initial test, a follow-up test confirmed that he also was infected by Covid-19 – just one week after Antioquia Governor Luis Fernando Suarez was hit by the virus. Then, on August 9, Mayor Quintero announced that another follow-up test confirmed that he no longer is infected and so he has returned to a normal work schedule.

Medellin Gets Extra Covid-19 Physician Support

On a related front, Mayor Quintero announced July 27 that Medellin just won extra physician support to confront a continuing surge of Covid-19 cases, following a special reunion with officials of Colombia’s principal medical trade associations.

The Colombian Society and the Antioquia Society of Anesthesiology and Reanimation, the Colombian Association of Critical Medicine and Intensive Care, the Colombian Society of Emergency and Emergency Specialists, and the Colombian Association of Internal Medicine all made “commitments that will allow providing complete health care to patients who require it in the following stages of the pandemic,” according to the Mayor.

Under the new arrangement, local hospitals just committed to adapting an additional 95 ICU beds, in addition to recent capacity expansions.

What’s more, each ICU physician that previously was responsible for overseeing 12 to 13 patients “will have a support team of anesthesiologists, respiratory therapists, chief nurses, general surgeons, among others, to achieve care of between 20 and 40 patients” per ICU specialist.

The new agreement heads-off a political gaffe by the Mayor when last week he proposed inviting hundreds of Cuban doctors to come to Medellin to help address the Covid-19 surge – a proposal publicly backed by left-wing demagogue Senator Gustavo Petro, a former M-19 guerrilla trained by the Cuban Communist government.

Problem: Colombia hasn’t verified the qualifications of any Cuban “doctors” for expertise in treating Covid-19 patients, Health Minister Fernando Ruiz announced.

What’s more, previous investigations have revealed that the Cuban government takes 60% of the salaries paid to its “volunteer” doctors sent overseas -- principally to prop up the near-bankrupt Communist dictatorship. In addition, at least one Cuban "doctor" posted overseas has been discovered spying on military installations.

Colombian medical associations had criticized the Mayor’s proposal because the Mayor hadn’t first consulted with Colombian medical associations on alternative ways to boost Covid-19 response capacity -- using existing Colombian physicians and support personnel.

Medellin-based multinational supermarket giant Grupo Exito announced July 27 that its second quarter (2Q) 2020 consolidated net income hit COP$12.8 billion (US$3.5 million) -- a complete reversal from the COP$18 billion (US$4.9 million) net loss in 2Q 2019.

Sales also rose 7% year-on-year (excluding currency change effects), to COP$3.56 trillion (US$968 million), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% year-on-year, to COP$299 billion (US$81 million).

The good results “reflect a positive variation in operational results in Colombia and Uruguay and a lower level of financial expenses,” according to Exito.

“Sales of direct and electronic commerce channels grew 191% in Colombia and 116% in Uruguay, responding appropriately to changes in customer consumption habits, due to Covid-19,” according to the company.

“In Colombia, the performance of ‘Éxito Wow’ [large-format stores] and ‘Carulla FreshMarket’ stood out, with food sales growing in double digits,” the company added.

Colombia operations registered 2Q 2020 sales of more than CO$2.7 trillion (US$734 million), up 4.7% year-on-year, taking a 77% share of the group’s total sales.

In Uruguay, sales grew 13.3% in local currency, “driven by the results of the Devoto and Disco brands, and a solid increase in sales of 116% from e-commerce and direct channels,” according to Exito.

In Argentina, sales grew 23% in local currency. At the end of the quarter, Exito implemented a sales model whereby customers could order goods in advance and then pick them up later, “capitalizing on the experiences of the other business units of the Group” that are adapting to restrictions on customer movements during the Covid-19 crisis.

Throughout its operations, “e-commerce and direct channels have responded to the great need of customers for the health emergency and accounted for 14.7% of the company's total sales during the second quarter of 2020, compared to 5.2% in the first quarter of the year,” according to Exito.

The company recorded a 263% increase in sales from e-commerce channels ( and and more than 40 million internet site visits. In addition, home deliveries jumped by 127% with 2.6 million orders in the latest quarter.

“Adoption of mobile applications -- with more than 3 million downloads and more than 87,000 orders in this period -- rose 480% over the second quarter of 2019,” according to Exito.

“Expansion and strengthening of the purchase-and-collection service in 450 stores in Colombia, with more than 59,000 orders, meant growth of 194.7% compared to the second quarter of the previous year.

“Launch of the virtual platform of the ‘Viva’ shopping centers, with purchase and pick-up service, represented 7.8% of total tenant sales in the second quarter of the year.

“These positive results in the retail business are a consequence of the company’s ability to adapt and transform in the midst of the health emergency . . . [which] managed to offset the performance of other complementary businesses such as Viajes Éxito and real estate that faced challenging situations during the quarter” because of the Covid-19 lockdowns.

Meanwhile, on the Colombian charity front, Grupo Éxito donated 700,000 Covid-19 face masks to 42 municipalities and to the national government, worth COP$1.4 billion (US$380,000).

As for Exito’s continuing programs providing child nutrition to the poor, “especially in the midst of the pandemic, Fundación Éxito has delivered more than 146,000 food packages to Colombian children and families since the beginning of the emergency,” the company added.

Colombia’s Health Ministry announced July 17 that because of recent court decisions, people 70-and-over now legally enjoy two-hours-per-day outdoor exercise privileges – not just three times/week under the Covid-19 regulations, but rather every single day.

Problem: Medellin simultaneously is banning all outdoor exercise by all persons – not just seniors – until Sunday, July 26 in the downtown Candelaria area (barrio 10) and until Tuesday, July 21 in the rest of Medellin.

The ban on outdoor exercise by all persons is just part of the new “orange alert” order here aiming to stifle a potentially overwhelming surge of Covid-19 cases in the next few weeks throughout Valle de Aburra.

While banning outdoor exercise, Medellin’s “Inder” sports-and-exercise promotion agency instead is now sponsoring Facebook Live exercise sessions so that people can enjoy supervised, coordinated exercise programs in the relative safety of their homes.

Meanwhile -- aside from Medellin -- the Colombian Health Ministry announced that “adults over 70 years of age . . . can develop physical activities, exercise outdoors and play sports individually for a maximum period of two hours a day, every day” -- or at least until a higher court eventually rules on the national government’s appeal, aiming to overturn the lower-court ruling.

People 70-and-older total only 7% of all Covid-19 cases, but they account for 50% of all Covid-19 deaths in Colombia and have a 40% chance of dying from the disease -- far greater than any other age group, Health Ministry statistics show. That’s why the national government has tried to impose tougher Covid-19 regulatory provisions on seniors venturing outdoors, where the chances of dangerous exposures to infected people are much greater.

The latest EcoAnalitica-Guarumo scientific survey of 2,122 voters across Colombia gives President Ivan Duque a 60% favorability ranking during the continuing Covid-19 crisis -- a slight decline from 63% favorability in the last survey in April.

The July 8-11 survey of voters in all major and minor Colombia cities has a margin of error of 2.5%, according to the company.

Among Colombian politicians with a national image, Medellin Mayor Daniel Quintero has the highest favorability ranking, at 81%, while Bogota Mayor Claudia Lopez has fallen to 68% favorability, down sharply from 78% in the April 2020 survey.

Left-wing demagogue Senator Gustavo Petro – who lost in a landslide to President Duque in the 2018 presidential election – now has a 61% unfavorability rating. Only 32% give the bombastic Petro a “favorable” ranking -- worse than his nemesis, former President, now-Senator Alvaro Uribe (37.6% favorable, 53% unfavorable).

Coming in last in unfavorability is former Colombia Vice President German Vargas, a defender of the deeply flawed “peace” treaty between former President Juan Manuel Santos and the narco-communist FARC army, principally responsible for starting and then continuing a war that killed more than 300,000 mostly poor people, kidnapped for ransom thousands of others, converted vast territories into cocaine areas, and forcibly displaced some 6 million during its nearly 60-year reign of terror in the Colombian countryside.

Asked about favorites for the 2022 presidential elections, the biggest single voter category was “none,” at 32%. Former Medellin Mayor and Antioquia Governor Sergio Fajardo got the most votes for any named candidate, at 22.5%, followed by Petro at 17% and former Medellin Mayor Federico Gutierrez at 12.6%.

As in the April survey, the July survey found that most voters continue to worry more about their jobs than about the Covid-19 threat.

In total, 34.6% of voters said “employment” was their top worry, followed by “corruption” (27.6%), “Coronavirus” (13.6%), “the economy” (9.5%), “security” (4.5%), “education” (3.6%), “health” (3%), “the environment” (1.9%) and, in last place, “peace” (1.7%).

As for what they're mainly doing for Covid-19 protection, 31.7% said they usually wear masks while 22.6% said they use social-distancing. Frequent hand-washing was reported by18.4%, while seeking tele-work (rather than commuting to a physical work-place) accounted for 13.2% of responses.

The Medellin-based “InnspiraMED” consortium producing relatively low-cost ventilators for critical Covid-19 victims got a big boost July 11 when Colombia President Ivan Duque came to Medellin to see for himself these in-development technologies.

According to “InnspiraMed” project coordinator Ruta N, “President Duque received information on the equipment delivery process -- taking place in the coming days -- according to the distribution schedule developed by the InnspiraMED initiative, with the support of the national government.

“The delivery of the first InnspiraMED ventilators began some days ago in different clinics and hospitals in the country, so that the institutions that have received them can use the equipment -- if required -- under the [legal cover] of ‘compassionate use,’” according to Ruta N.

The “compassionate use” exception follows “guidelines of the External Circular 031 of May 27, 2020 issued by the Ministry of Health and Social Protection, which indicates that this type of equipment can be used in particular conditions within the [Covid-19] emergency in the country as long as the patient or their responsible relative gives authorization,” according to Ruta N, Medellin’s high-technology incubator organization.

InnspiraMED is an “interdisciplinary and collaborative exercise” coordinated by Ruta N and funded by Medellin-born, bottled-beverages manufacturing giant Postobón.

The collaboration includes University of Antioquia, Sampedro Medical Industries and EIA University, featuring “engineers, intensive-care specialists and pulmonologists,” as well as manufacturing specialist Haceb (appliance maker) and motorcycle assembler Auteco Mobility, Ruta N added.

President Duque’s July 11 visit to Medellín not only included educational presentations on the InnspiraMED ventilators, but also included delivery of the first 50 of 187 fully commercial, Invima-certified ventilators that the national government procured from international suppliers for Medellin and Antioquia.

Crucial Situation for Banana, Coffee Harvests

During the visit, Antioquia Governor Luis Fernando Suárez urged the President to provide special support “to address the critical situation of the Urabá banana region and the upcoming coffee harvest in the Southwest” of the department.

The Governor added that his government -- together with the mayors of the banana-growing municipalities of Chigorodó, Carepa, Apartadó and Turbo -- filed a letter with the Ministry of the Interior asking for a special quarantine.

“We do not want to get to the stage where we have to stop, for example, the banana industry, due to the effects of the pandemic,” Governor Suárez said.

In addition, “we are going to have between 40,000 and 50,000 people who are going to arrive [in Antioquia] in the next 15 or 20 days” to work in the semi-annual coffee harvest. “If at the time of the coffee harvest Antioquia faces a collapse [in capacity] in ICUs, we do not want to look at that scenario,” he added.

“That is why it is very important at this time that [the national government] help us with the necessary ventilators to install in the next few days in Antioquia. We have the goal of having, in August,  909 ICU beds, to avoid having people die waiting for an ICU bed,” he said.

As of July 11, Colombia’s Health Ministry had recorded a cumulative national  total of 145,362 Covid-19 cases since monitoring began five months ago. Over that period, Colombia has recorded 5,119 deaths and 61,186 recoveries.

Bogota leads with 47,524 cases, followed by Atlantico (32,635); Cali/Valle del Cauca (14,207); Bolivar (11,913); Antioquia (8,744); Nariño (4,457); Cundinamarca (4,052); Sucre (2,419); Amazonas (2,411); Magdalena (2,785); Choco (2,177); Meta (1,548); Tolima (1,435); and Santander (1,261), according to the Ministry.

Medellin-based multinational utilities giant EPM announced July 10 that it supports Medellin Mayor Daniel Quintero’s new decision to postpone debate on a proposal that would vastly expand EPM’s areas of business.

The proposal (see Medellin Herald July 3, 2020) would have EPM launch into whole new areas nationally and internationally, including highway and mass-transit infrastructure projects, manufacture and supply of renewable-energy systems and services, and a vast array of commercial services for consumers and businesses.

However, Medellin Mayor Daniel Quintero announced late last night (July 9) via his Twitter account that “social sectors and some businesses have asked us to withdraw the [proposed] project so that it can be discussed inside and outside the [City] Council in working groups. I always like to buy time and move fast but in this they are right. The project will be presented in October. In the meantime, we will create working groups with unions, citizens and social leaders to build together the future of our EPM."

Then today (July 10), EPM announced via its official Twitter account that “we want to lead technological innovation processes, taking care of the environment, guaranteeing well-being and quality in services. That is why we support the decision of our Mayor Quintero and we continue with the purpose of working on this initiative.”

Prior to the new EPM and Mayoral decisions to postpone debate on the proposal, Medellin City Council President Luis Bernardo Vélez announced July 8 that “changing the corporate purpose of [EPM] requires in-depth study, and that task must be addressed before making any decision that affects the interests of citizens.”

In the proposal, EPM and the Mayor prudently warn that while public utilities need to expand and evolve in order to survive in an ever-more-competitive business world, EPM must be careful to avoid undercutting its exceptionally good bond ratings with both Colombian and foreign investors. The issue: Big expansions into new business areas potentially could violate existing bond covenants -- possibly triggering massive, expensive prepayments -- and potentially could harm loan terms and interest-rates on any future bond floats, the proposal adds.

Meanwhile, on the bond front, EPM general manager Álvaro Rendón López on July 8 hailed a just-completed peso/dollar bond-float totaling US$751 million.

The float included COP$635 billion in peso-denominated debt (equivalent to US$176 million) plus another US$575 million in dollar-denominated debt, with investors in the United States, Canada, Europe, Asia, Chile, Peru and Colombia eagerly gobbling-up the offer -- actually demanding 3.4 times the total amount offered by EPM, Rendón noted.

“With this operation, EPM becomes the largest issuer of bonds denominated in Colombian pesos in this [international] market, this being its fifth operation which includes this [combined peso-and-dollar] financing method,” according to EPM.

“The placement results are a reflection of the credibility of local and international investors in EPM’s financial strength, even amid the current circumstances of uncertainty in the economy worldwide due to the effects caused by the Coronavirus pandemic,” Rendón said.

“The international bond issue received an investment grade rating, equal to that of EPM, by the firms Fitch Ratings and Moody’s,” EPM added. “For Fitch Ratings, EPM’s ratings are the result of the company's low commercial risk, thanks to its diversification and characteristics as a provider of public services.

“For its part, Moody’s affirms that ‘EPM's ratings reflect its consolidated and diversified income base by sector, with the electricity distribution business having the largest contribution to EBITDA.’”

Acting Antioquia Governor Luis Fernando Suárez Vélez on July 9 issued an “orange alert” as growing Covid-19 cases have now grabbed 50% of intensive care unit (ICU) capacity in Antioquia.

Following the alert, Antioquia Health Secretary Lina María Bustamante Sánchez ordered a department-wide restriction on non-emergency surgeries or dental work in order to ensure more spare ICU capacity.

“Non-urgent surgeries and outpatient procedures will be canceled in order to free more beds of intensive care units,” Bustamante said.

“Obviously, there will be [ICU bed] occupation due to trauma or due to the complication of other pathologies. For this reason, we want to reduce surgeries that are not necessary. We need to free health services, avoid cross-contamination and start to free-up human resources to attend patients diagnosed with Covid-19,” she added.

As a result, as of July 9, new restrictions on health services include “services related to oral health care; outpatient surgeries and non-urgent procedures; [and] external consultations in promotion and prevention procedures and other outpatient services,” according to the order.

“To reduce the risk of contagion in the Department, these measures must be accompanied by actions of individual social responsibility such as reducing levels of mobility, avoiding family gatherings, promoting telework, permanent use of masks, frequent hand washing and social distancing,” the order adds.

“We are going to have more cases -- and the system may collapse, so we are taking action today,” Bustamante said. While spare ICU bed capacity still exists here, “occupancy is going to double,” she warned.

“We are having a high number of infections. With the pilot program [of independent workers traveling on the Medellin Metro system now getting Covid-19 tests] we have realized that there is free circulation in the Department and we cannot lose control if health services were to collapse,” Bustamente concluded.

To date, Antioquia accounts for 11% of the total tests for Covid-19 infections in Colombia, according to the national Health Ministry.

On July 9, the Ministry reported 578 new cases of Covid-19 in Antioquia. Since tracking began five months ago, Antioquia cumulatively accounts for 7,825 cases, of which 4,802 are active and 2,954 recovered.

Page 10 of 66

About Medellin Herald

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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