Antioquia’s ‘Pacifico 2’ Highway Project Reaches Financial Close

Colombian construction giants Odinsa and Construcciones El Condor and Colombia’s infrastructure financial agency (Financiera de Desarrollo Nacional, FDN) jointly announced September 9 that financial close has finally been achieved for the “Pacifico 2” highway projects in Antioquia, part of the massive “fourth generation” (4G) highway projects.

One portion of “Pacifico 2” involves rehabilitation of 54 kilometers of the existing two-lane highway between Primavera (Medellin southern suburbs) and the Cauca River port of La Pintada, where “Pacifico 2” connects with “Pacifico 3” and related highway projects all the way to the Pacific port of Buenaventura.

The other portion of “Pacifico 2” involves building 42.5 kilometers of a divided, four-lane highway including 37 kilometers of new roads, 2.5 kilometers of a new tunnel and 43 bridges, connecting La Pintada and Bolombolo, which then connects to the new “Pacifico 1” highway project between Bolombolo and Medellin.

Project developers estimate that the combined “Pacifico 1” and Pacifico 2” projects will cut at least 25% off the time for freight shipments between Medellin and La Pintada, enabling an average vehicle speed of 80 kilometers per hour.

The “Pacifico 2” project partly required U.S. dollar financing of US$250 million over a 14-year repayment schedule — involving Brasil-based Itau UniBanco and Peru’s Banco de Credito — plus another COP$510 billion (US$174 million) involving FDN and local Colombian banks Banco de Bogota and Davivienda, with an 18-year repayment schedule.

To help achieve financial close, Odinsa won FDN guarantees worth COP$252 billion (US$86 million) while Construcciones El Cóndor won FDN guarantees worth COP$150 billion (US$51 million), according to the companies.

Odinsa – which now has a 78.8% share of the Pacifico 2 project – said that it has already obtained all environmental licenses, cut deals to acquire about 75% of the properties adjacent to the project and completed about 70% of the rehabilitation work on the Primavera-La Pintada highway.

All three portions of the project connecting Medellin to Buenaventura– Pacifico 1, 2 and 3 – have now achieved financial close, the company added.

“This is a very relevant milestone in infrastructure finance in Colombia and confirms the strength of the structure of the ‘4G’ concesssions,” Odinsa president Mauricio Ossa added.