Latin America: Colombia to launch roadshow for Metro de Bogotá project next month

06 March 2018 - 12:00 am UTC

Colombian national development bank (FDN) is planning to launch next month a roadshow to promote a long-term DBFOM concession for the USD 4bn Metro de Bogotá first line project.

A joint venture comprising advisory firms KPMG and Structure Banca de Inversión is leading the roadshow launching on 9 April in KPMG’s offices in London, two sources familiar told Inframation.

FDN had hired KPMG-Structure joint venture in June to create the financial structure of the contract for the first line of the Metro de Bogotá project.

According to the proposed integral contract, the concessionaire is expected to design, finance, build, operate and maintain the project, including the procurement of the necessary machinery and rolling stock.

The contract is anticipated to have a life ranging between 20 and 30 years, the sources added.

The estimated investment required by the project is approximately USD 4bn, but the concessionaire will only need to procure USD 1.4bn. The remaining will come from payments executed by the grantor during the construction period, one of the sources familiar said.

The analysis is considering a potential 70:30 equity-to-debt ratio, although final details are yet to be defined.

An international developer that is following the project told Inframation that it will be key to know in detail how the numbers add up.

Empresa Metro de Bogotá (EMB) will be the counterparty of the concession contract. As grantor, EMB is prevented from forming a public-private-partnership (PPP) based on Article No 14 of Law 1882 of 2018. Instead, EMB will execute the DBFOM contract under Law 80 of 1993 and Law 1150 of 2007, according to one of the sources.

EMB announced on Tuesday that it started a process to acquire land needed to develop the project.

As of December 2017, the city and the national governments combined had approved resources worth COP 22.3trn (USD 7.8bn) to support the project.

EMB’s general manager Andrés Escobar said in press conference that this process has started with a census among owners of commercial and housing real state to determine their individual needs. EMB is advancing this process to ensure the timely development of the project and to avoid budget overruns.

Multilateral financial institution IDB Group is expected to support the project, according to a release posted by EMB on 2 March.

Escobar previously said that multinational companies with expertise and experience in the sector have expressed interest in the project and are expected bidders.

US-based AECOM, Spanish Acciona and Ferrovial, French Vinci and Austrian Strabag are all international developers with a presence in Colombia and relevant expertise in the sector.

FDN declined to comment. KPMG and Structure Banca de Inversión also declined to comment.