Antioquia’s ‘Mar 2’ Highway Project Gets US$173 Million Loan OK from FDN

Colombia’s Financiera de Desarrollo Nacional (FDN, a national development bank) announced July 25 that its board of directors approved a 17-year term loan of up-to-COP$500 billion (US$173 million) for the “Mar 2” highway project linking Medellin to current and future Atlantic ports.

“The credit granted by the FDN represents 25% of the total financing of the project,” according to FDN. The Mar 2 project “also will have financing from the Chinese Development Bank, which will represent 37% of its total financing.”

FDN added that it’s “co-structuring” the loan package with Sumitomo Mitsui Bank and is leading a “search for additional resources in pesos and mobilization of sources for the project.”

“Mar 2” will connect with the under-construction “Mar 1” project west of Medellin, which includes a new, twin tunnel adjacent to the existing “West Tunnel” connecting Medellin to Santa Fe de Antioquia.

The Mar 2 project also links to the under-construction “Toyo” tunnel, which eventually will become the longest highway tunnel in Colombia.

Not only will “Mar 1” and “Mar 2” drastically improve freight transport between Medellin and Atlantic ports, but the projects also will improve connections to the “Transversal de las Américas” highway project along the Caribbean coast.

The “Mar 2” contract covers a total length of 277.7 kilometers, of which 17.7 kilometers involve new construction, 51.6 kilometers involve highway upgrades, 71.4 kilometers involve rehabilitation of existing roadway, and 137 kilometers involve highway operation and maintenance.

Thanks to the project, vehicles will cut about two hours of travel time between Medellin and Atlantic ports, with improvements in average speeds ranging from 60 to 80 kilometers per hour, up from 40 to 60 kilometers/hour currently, according to FDN.

Sponsors of the project include China Harbor Communication Construction (CHEC), with a 60% share, plus SP Ingenieros (20% share), Unica (15% share) and Termotecnica (5% share), according to FDN.

CHEC’s involvement represents “the first time that a Chinese company participates in a highway concession project in Colombia,” according to FDN.

CHEC is a subsidiary of China Communications Construction Company (CCCC), the fourth-largest engineering and construction company in the world in terms of revenue, and the third largest transport infrastructure company in the world in terms of revenue and market capitalization, according to FDN.

Meanwhile, Medellin-based S.P. Ingenieros S.A.S., founded in 1983, “has been in charge of the construction, improvement and rehabilitation of more than 1,200 kilometers of roads and 14 kilometers of tunnels and bridges,” according to FDN.

Unica and Termotécnica – both subsidiaries of Bogota-based Ethuss Group — are involved in numerous Colombian infrastructure projects, including the “Conexión Norte” highway in Antioquia as well as other projects including oil pipelines and airport construction.

On a related front, FDN also announced that it granted a bank guarantee to Termotécnica for up to COP$57 billion (US$17 million) “to support the equity contributions of both [Termotecnica] and Unica to the Mar 2 project,” according to FDN.