Navelena Achieves Financial Close on Crucial Magdalena River Dredging Project

Cormagdalena – the Colombian government agency overseeing a dredging project for the Magdalena River that would dramatically improve freight movements – announced December 16 that project developer Navelena SAS has at last achieved financial close on the COP$2.5 trillion (US$877 million) “public-private association” (APP in Spanish initials) project.

The project had suffered numerous financial-closing delays because of problems with former consortium partner Odebrecht (see: “Magdalena River Dredging Project Fails to Meet Financing Deadline,” Medellin Herald, June 13, 2016). Further troubling questions were raised when U.S. officials revealed last month that Odebrecht had paid bribes totaling US$11 million to certain yet-to-be-identified officials in Colombia, possibly for certain highway project contracts. However, Colombian Attorney General Nestor Humberto Martinez announced January 5 that further investigations have shown that Odebrecht apparently didn’t pay any bribes for contracts tied to the Magdalena River project.

Sumitomo Mitsui Banking Corp. (SMBC) has now stepped-up with US$250 million financing for the project, according to Cormagdalena. That’s US$20 million more than the agency had required to approve the project.

With the financing problems now resolved, Navelena will launch work on the dredging project in January 2017, according to the agency. Completion of the project will boost economic competitiveness of industries and commerce in Colombia — including Medellin and Antioquia.

Initial work – lasting five years — will focus upon a 256-kilometers-long stretch between Barrancabermeja and Puerto Salgar, in order to guarantee a shipping-lane depth of at least seven feet, which will permit convoys of up-to 7,200 tonnes of cargo, according to the agency.

“We are going to make the Rio Magdalena the great highway of the nation,” added Navelena managing director Jorge Barragán.