MIGA Supports Development Finance Institution in Colombia
MIGA Supports Development Finance Institution in Colombia
Agency’s coverage will facilitate more loans
for urban development projects
Washington, March 18, 2015 – The Multilateral Investment Guarantee Agency (MIGA)—the political risk insurance and credit enhancement arm of the World Bank Group—announced today its support for a program that will provide lending for projects in urban mobility, health and education infrastructure, social housing, and services in a number of cities across Colombia.
MIGA is providing a guarantee of $95 million covering non-honoring of financial obligations by a state-owned enterprise (NHSOE) to KfW Bankengruppe (KfW), the bilateral German development finance agency, for their long-term financing to Financiera de Desarrollo Territorial S.A. (Findeter) of Colombia. Findeter is an infrastructure development finance institution that lends to urban infrastructure development projects directly and through financial intermediaries, such as commercial banks.
This project represents MIGA’s first-ever use of its NHSOE guarantee product. MIGA’s guarantee covers KfW against the risk of non-payment on their loan to Findeter. The KfW loan proceeds will be used by Findeter to finance 20-30 sub-projects.
Colombia is primarily an urban country, with almost 76 percent of its population living in cities. With the scope of this financing spread across at least eight cities, MIGA’s support is facilitating improved infrastructure for large populations across the country.
“MIGA’s guarantee allows us to access International financing that we can pass on to financial intermediaries and ultimately to the end-borrowers for investments that improve the quality of life for the population of Colombia and its growing cities,” says Luis Fernando Arboleda President of Findeter.
Traditionally Findeter has obtained long-term finance from multilateral development banks. This transition to bilateral financing, without sovereign support, marks an important part of Findeter’s long-term strategy to diversify its sources of funding. The next step in this transition for Findeter is to access financing from commercial banks for the next phase of infrastructure financing.
“Helping our partner countries create better living conditions through sustainable urban development with a focus on urban mobility is an important part of our mandate,” says Michael Evers, Head of the Latin America Division on Sustainable Urban Development. “Findeter plays an important role in improving the quality of life in Colombia’s cities.”
“We are pleased to support this project, which facilitates lower-cost financing for Findeter, enabling it to contribute to sustainable urban infrastructure projects that will help reduce income disparity in Colombia,” says Keiko Honda, MIGA Executive Vice President and CEO.
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MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
MIGA Contact:
Mallory Saleson, MIGA
Tel: +1 202 473-0844
E-mail: msaleson@worldbank.org
Rebecca Post, MIGA
Tel: +1 202-473-1964
E-mail: rpost@worldbank.org
Cara Santos Pianesi, MIGA
Tel: +1.202.458.2097
E-mail: csantospianesi@worldbank.org