Navelena Faces February 22 Deadline to Re-Finance Magdalena Dredging Project
Cormagdalena – the Colombian government agency overseeing a proposed dredging project that would dramatically improve freight movements on the Magdalena River – announced January 31 that project developer Navelena now faces a February 22 deadline to present a new financing scheme.
The agency demand arose because Japan’s Sumitomo Mitsui Banking Corporation has just decided to abandon the project because of continuing involvement of Brazil-based construction contractor Odebrecht, which is involved in a multinational bribery scandal.
Ironically, Colombia’s 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 (see Medellin Herald on December 17, 2016).
But those assurances apparently weren’t sufficient for Sumitomo, so now Navelena has to start all over again in seeking finance for a “public-private association” project estimated at COP$2.5 trillion (US$877 million).
Cormagdalena deputy commercial director Dina Sierra announced that Navelena now must bring new documentation that would support proposed project financing.
“If not achieved, the process to follow would be to initiate an expiration of the contract,” Sierra said.
“In any case, the entity [Navelena] continues with a ‘Plan B’ that has been structured since last year. We are very optimistic, we seek to save this contract . . . [and we] look for financial closure so that the project continues in the best way.”