1. XXXXXX XXXXX
Latin Latin Infrastructure Quarterly 1
Infrastructure
Quarterly
Infrastructure in Colombia:
a multi-sector analysis
Read from professionals at Darby Private Equity, Agencia Nacional de
Infraestructura, Banca de Inversión Bancolombia, Ashmore Management
Company, Acciona Infraestructuras, Durán & Osorio Abogados, Inter-American
Development Bank, and the Canada-Colombia Chamber of Commerce.
Infrastructure The North REAL
& American view: Infrastructure
security EDC & OPIC Partners

2. 2 Latin Infrastructure Quarterly XXXXXX XXXXX

3. Latin Infrastructure Quarterly 3
Contributors
To Our Readers:
Andrade Moreno, Luis Fernando
Agencia Nacional de Infraestructura
Welcome to the 5th Issue of Cardyn, Jean
Export Development Canada
Latin Infrastructure Quarterly. Castellanos, Jorge
I
Darby Private Equity
would like to begin this letter by pointing out that it has been one year since the
release of the first Issue of Latin Infrastructure Quarterly. It has been a very in- García, Juan
teresting journey so far. Thank you to everyone that helps out in this endeavor: Critical Infrastructure Consultant
Nate Suppaiah, Arman Srsa, Tiffany Joy Swenson, and Lakshmi Narayanan.
Thank you as well to all of our contributors and media partners. Giménez Mathus, Agustín
FGM Lawyers
This Issue covers primarily infrastructure finance and development in Colombia. Girardotti, Federico
We have contacted and interviewed infrastructure practitioners from different sec- Faros Infrastructure Partners
tors and put together a comprehensive report of one of the most active infrastructure
markets in the region. Harwood, Timothy
Overseas Private Investment Corporation
This Issue also contains an article that links infrastructure and physical security
which is a topic that I have been meaning to cover for a while. We finally found an Kristin, Dacey
expert on the field that offered some analysis. We hope to keep bringing you analysis Inter-American Development Bank
on this highly important matter. You will also find an interview to a VP of Export
Llamosas, Cecilia
Development Canada and an article by professionals of the Overseas Private Invest- Vouga & Olmedo Abogados
ment Corporation.
López, Susana
There are a number of other great articles inside for you to enjoy. REAL Infrastructure Partners
Lastly, I would like to point out that I have been invited to speak about PPP project Marcus, Sara
implementation in Latin America at the Second International Conference “Speed Overseas Private Investment Corporation
uPPP Ukraine” which will be held in Kiev on April 11 and 12 of next year. It is com-
Mendes, André
mendable how the sponsors of this international conference are eager to learn about
BNDES
the experience of other regions of the world such as Latin America, Western Europe,
Asia, and North America. Ruiz-Mier Fernando
International Finance Corporation
Please do not hesitate to contact me at patricio@liquarterly.com with feedback on
this Issue, questions, topics you would like to read about, events you would like to Sáez Martínez, José Damián
promote, and practitioners, companies or projects you would like see featured. Acciona
Best regards, Sanchez Garcia, Carlos
Durán & Osorio Abogados
Serani, Jean Pierre
Banca de Inversión Bancolombia
Soto Franky, Camilo
Valfinanzas
Patricio Abal.
Trevino, Andrés
Canada-Colombia Chamber of Commerce
Villaveces, Camilo
Ashmore Management Company (Colombia)
Vouga, Rodolfo
Vouga & Olmedo Abogados
Wilson, Josh
Staff Writer

4. 4 Latin Infrastructure Quarterly Sponsors

5. Contents 5
Contents
Issue Focus: Infrastructure in Colombia:
a multi-sector analysis
Colombia: Infrastructure and Investment.............................................................6
Colombia’s mastermind of infrastructure development.......................................10
The role of investment banks in Colombian infrastructure development............14
The view from Canada........................................................................................18
Colombia: Insights on social infrastructure development...................................22
Public Private Partnerships: A New Concept for the Colombian Law.................26
Infrastructure and private equity in Colombia.....................................................31
Acciona Infraestructuras Colombia....................................................................34
Ashmore Colombia Infrastructure Fund.............................................................37
Sectors
An Optimistic Outlook For Infrastructure, Transport And Logistics Services In
Paraguay..............................................................................................................41
Social Responsibility and Infrastructure Development.......................................44
Bringing projects to market: the view from a private sector advisor and
investor.................................................................................................................46
Real Infrastructure Capital Partners ...................................................................48
The Overseas Private Investment Corporation and LatAm..................................52
EDC - Canada’s export credit agency.................................................................54
Choosing the Right Security Provider.................................................................59
The New Renewable Energy Regulatory Framework of El Salvador.................62
Local Content in the Brazilian O&G sector.........................................................66

6. 6 Latin Infrastructure Quarterly Institutions
Colombia:
Infrastructure
and Investment
Josh Wilson, Staff Writer
C
olombia, the third most-pop-
ulated country in Latin Amer- Colombia has appeared many times in previous issues of
ica and the second amongst Latin Infrastructure Quarterly, most notably in the second
Spanish-speaking countries and third editions, featuring the Colombian Infrastruc-
throughout the world, is on path toward
becoming one of the region’s most friend- ture Chamber and the new Colombian Public-Private
ly destinations for foreign direct invest- Partnership Law, respectively. The current issue revisits
ment. At the same time, the emerging na-
tion is at a competitive disadvantage with this emerging global player with a series of new takes on
respect to its Andean neighbors due to a Colombian infrastructure development. This article takes
significant lack of adequate roads, high- aim at the current investment climate generally, focusing
ways, railroads, and quality ports. Thus,
in Colombia, infrastructure presents both in particular on foreign direct investment.
an obstacle and a real opportunity.
Colombia cannot capitalize on its im- a significant infrastructure deficiency. funded, in part, through concession con-
mense potential without addressing its The remedy may be simple – foreign di- tracts that will intimately involve the pri-
infrastructure problem. The United States rect investment. vate sector. But concessions are only the
Commercial service estimates that logis- The Colombian government seems to beginning of the story, as this edition of
tical operation costs account for nearly agree. In 2011, it created the Colombian LIQ will illustrate.
18 percent of the total cost of each Co- Infrastructure Agency (ANI) under the
lombian business. The country’s infra- Ministry of Transportation to usher in a Foreign Direct Investment.
structure ranked 85th out of 142 countries new era of infrastructure development.
in the World Economic Forum’s Global By 2014, the government plans to employ Recent endorsement of FDI is not a new
Competitiveness Report 2011-2012. The more than USD 15 billion in investments phenomenon. The Colombian government
quality of roads, railroad, port, and air on infrastructure projects and grant USD has shown a commitment to economic
transport infrastructure, ranked 108th, 26 billion in concessions for highways liberalization since the 1990s, earning
99th, 109th, and 94th, respectively. Ac- and railroads, according to GlobalTrade. the country a reputation as a stable and
cording to that report, “inadequate sup- net. For example, plans are underway to market-friendly investment destination.
ply of infrastructure” is the second most construct highways that will connect the It has signed various International Invest-
problematic factor for doing business in major cities (Bogotá, Medellin, Cali, Bar- ment Agreements and ratified a number of
Colombia, behind only corruption. The ranquilla) to ports on both the Atlantic Free Trade Agreements. In the years since
problem is clear – Colombia suffers from and Pacific Ocean. These projects will be 2002, the trend has gathered momentum,

7. Institutions Latin Infrastructure Quarterly 7
resulting in an “investment grade” rating economy is positive. GPD per capita last year, all indications are that the over-
by all three major credit rating agencies: nearly tripled in the years from 2000 to all business climate will continue to grow
Standard and Poor’s, Moody’s and Fitch. 2011, while inflation over the same pe- and improve steadily.
Colombia’s FDI achievement in 2011 riod was reduced by two-thirds. The Eco- Political violence is on the decline as
provides evidence of such momentum, nomic In- tel- the government has made security a prior-
as the country bounced back in the wake ity. Membership in illegal armed groups,
of the global economic crisis by setting a such as the Revolutionary Armed
historic total of over USD 13 billion Forces of Colombia (FARC),
for the year. has steadily decreased. The
The petroleum (“oil”) sec- International Institute
tor is the largest recipient for Management De-
of foreign direct invest- velopment (IMD)
ment in Colombia. In ranks Colombia
2011, by the Colom- second in Latin
bian Central Bank’s America in per-
numbers, FDI in sonal security
the oil sector rep- and adequate
resented nearly protection
39 percent of all of private
FDI. The min- p r o p e r t y,
ing sector came behind only
in second at just Chile. One
over 19 percent. can expect
These relative Colombia
proportions have to remain
remained fairly secure and
consistent over the political vio-
last decade. But oil lence to con-
and mining are not tinue to decline.
the only sectors to re- However, to
ceive FDI. Other notable date, the Colom-
sectors include commerce bian government has
and hospitality (16%), and failed to adequately ad-
transportation and communica- dress drug-trafficking and
tion (13%), along with the sectors the organized crime that ac-
who received much less – manufactur- companies the trade.
ing, utilities, financial, construction and The potential investor should be aware
agribusiness. The countries that have of the challenges presented by corruption.
contributed most to Colombia’s FDI in- ligence Unit reports 5.9 According to the World Economic Forum’s
flows from 2000-2011 were the United percent GDP growth in 2011. However, Global Competitiveness Index (2011-12),
States, England, Spain, and Canada. the same group projects 4.3% average corruption is the most problematic factor
GDP growth in years 2012-20 and 3.1% for doing business in Colombia. Transpar-
Outlook and Risks. in 2021-30. While this means that the Co- ency International ranked Colombia 80th
lombian economy would not continue to out of 183 countries in its Corruption Per-
The general outlook for the Colombian see the same robust growth it experienced ceptions Index 2011.
Foreign Direct Investment
US$ Million
1990 1995 2000 2005 2011
Colombia 500 968 2,436 10,252 13,234
Brazil 989 4,859 32,779 15,066 66,660
Chile 661 2,957 4,860 6,984 --
Peru 41 2,557 810 2,579 --
Source: World Bank

8. 8 Latin Infrastructure Quarterly Institutions
FDI Sector Comparison
US$ Million
2006 2007 2008 2009 2010 2011
Total FDI 6,656 9,049 10,596 7,137 6,746 13,297
Oil Sector 1,995 3,333 3,405 2,428 2,781 5,125
Non-Oil Sec-
4,661 5,716 7,192 4,709 3,965 8,173
tor (Subtotal)
Source: Central Bank of Colombia (Banco de la República de Colombia)
* Note: There are minor discrepancies between the FDI data provided by the Central Bank and those provided by World Bank, as seen above.
As with other problems, the govern- ry, often find themselves at odds with one Legal Framework.
ment has attempted to address the cor- another. While the current administration
ruption issue. President Santos signed the seeks to reform the judicial system, any The Colombian legal framework provides
Anti-Corruption Statute into law last year meaningful efforts have been thwarted. a number of protections and incentives for
which aims to shore up many transpar- The state of the judiciary presents foreign investment. It is guided by a prin-
ency and accountability dilemmas. particular difficulties for the investor ciple of equal treatment and universality,
Judicial deficiencies also present cause when resolving commercial disputes, meaning that the law imposes neither dis-
for concern. Courts are underfunded and for example, when seeking to enforce a criminatory nor favorable conditions on
inefficient. Civil trials can be delayed for contract. Colombia ranks 149 out of 183 foreign investors, and with a few excep-
years. The Constitutional Court has con- economies for the ease of that process, tions, permits investment in all sectors of
siderable discretionary authority to rule according to The World Bank Interna- the economy. Essentially, foreign invest-
on the actions of the executive. The Su- tional Finance Corporation economy ment is permitted in all sectors except de-
preme Court and Constitutional Court, profile on Colombia, Doing Business fense and national security and disposal
roughly coequal branches of the judicia- 2012. of toxic waste. Only investment in mining

9. Institutions Latin Infrastructure Quarterly 9
and hydrocarbons, and the insurance of
financial sectors, requires prior authoriza-
tion by the Colombian government. But
in all sectors, FDI will invite some restric-
tions particular to the investment activity,
any number of which are too lengthy to
adequately address here.
The primary foreign investment pro-
tections available are provided by legal
stability contracts, international invest-
ment agreements, double taxation agree-
ments, and various free trade agreements.
By 2014, the
government
plans to employ
more than USD
15 billion in
investments on
infrastructure
projects and
grant USD
26 billion in investment. In return, the laws applicable year, 91 different FTZs account for USD
concessions for to the investment will remain in effect for
a period of three to 20 years, based on the
6 billion in investments and have created
43,355 Colombian jobs.
type and amount of the investment. In summary, the Colombian govern-
highways and Incentive schemes also make up a key ment welcomes investment and has taken
part of the Colombian legal framework clear steps toward fostering a market-
railroads. for business. The “free trade zone (FTZ)”
is a mechanism provided by the Colom-
friendly investment climate. The state
of infrastructure in the country is such
bian government to stimulate investment that it seems the next logical destination
and domestic job production. These are for significant foreign direct investment.
specific geographic areas that enjoy a spe- However, certain risks may continue to
“Legal stability contracts” are offered cial tax and customs regime. Benefits of restrain Colombia’s ability to grow and
to guarantee that the laws under which an the FTZ include, but are not limited to, a compete.
investment is entered into will remain in 15 percent corporate profit tax and simpli- At the price of sacrificing much detail,
effect over the life of the investment. In fied customs procedures. Among the vari- this article has attempted to cut a broad
order to receive a legal stability contract, ous requirements to qualify for a FTZ, an swath of the current state of the Colom-
the minimum value of the investment investment project must meet a specified bian economy as it relates to investment.
must reach USD 1.2 million and the in- minimum investment and create a mini- For more information, please refer to the
vestor must pay a fee, determined by the mum number of domestic jobs. As of last articles that follow.

10. 10 Latin Infrastructure Quarterly Institutions
The Agencia Nacional de Infraestructura:
I went over the strategic plan for the years
2010-2014 that the Agencia Nacional de
Infraestructura (“ANI”) put together
and found it really informative. ANI’s
Colombia’s
goals are ambitious and the financial and
human resources needed to achieve them
are great. The strategic plan calls for pri-
vate sector resources to complement the
public sector. In what ways does the ANI
interact with the private sector?
mastermind
Some of the goals are that ANI is structur-
ing and will award PPP contracts over the
next two years in the amount of US$ 27
billion. The two most significant elements
of the program are Road PPPs (US$ 20
billion) and Rail PPPs (US$ 6 billion).
The typical contract will have one year
of
for pre-construction activities, 5 years for
construction, and 15 years of operation
and maintenance.
In terms of laws and regulations that
protect investors, Colombia is widely rec-
ognized as an investor friendly environ-
ment. For example, Colombia is ranked
infrastructure
by the Doing Business report of the World
Bank as the 5th best country in the world
in terms of Investor protection, and the
best in Latin America.
Colombia also has a proven record ap-
plying the concession model. We have
development
been structuring concessions for transpor-
tation infrastructure projects for 25 years.
During this period we have a robust legal
system that offers clear rules to investors.
For example, we have developed an ar-
bitration system to resolve conflicts that
ensures objective and timely decisions.
In Colombia there are two entities
LIQ talks to
which build and finance transportation
infrastructure. One is ANI and the other
INVIAS (in charge of public works -it co
finances the roads with the governor of
Luis Fernando
the department or the major of the city at
stake).
Something that caught my attention is
that the ANI expects to move forward
Andrade Moreno, with “structuring a new generation of
concessions under a lessons learned
framework” (… estructuración de una
nueva generación de concesiones bajo
President
un marco de lecciones aprendidas…
página 10 del Plan Estratégico), what
are the lessons learned?

11. Institutions Latin Infrastructure Quarterly 11
The lesson learned here is that
In the past, most of the risk was assumed
by the government as well as the financ-
ing of the project. The government had a
system of paying in advance through “an-
ticipated payments” to the private conces- the government can find a solid
sionaire and with time there were some
cases when the private would declare private investor and partner who
itself “without liquidity to continue the
project” so the government would end up
financing the private sector and the proj-
commits to build, finance and
ects would take more time to be finished
or not finished at all. The lesson learned operate the road or project at
here is that the government can find a
solid private investor and partner who
commits to build, finance and operate the
stake and only after the project
road or project at stake and only after the
project is operating does the government is operating does the government
recognize and starts paying off the private
investor through a system of infrastruc- recognize and starts paying off
ture bonds* that can be negotiated in the
capital markets. (*these bonds are being
developed with the Ministry of Finance the private investor.
together with ANI).
How does the recently enacted PPP law The new PPP law also has a new in- • Incentives to private initiatives (un-
favor the channeling of private sector centive for the private sector to present solicited proposals) for projects that
financial and human resources for the private construction initiatives (under do not require government funding.
modernization, construction, operation the scheme Build, Operate, Mainte- • Introduction of a Pre-qualification
and maintenance of infrastructure assets? nance and Transfer) for those projects phase to limit the number of competi-
that can be fully financed by a private tors to those most qualified during the
The PPP law 1508/2012 and its decree proponent and do not require public bidding process.
1467/2012 introduced a number of ben- funds. These can be presented to the • Introduction of service levels as cri-
efits that promote the participation of in- ANI as “private initiatives” and the teria to recognize payment for the in-
frastructure funds for institutions whose initial private proponent will have the frastructure.
investment had been relatively low in right to improve the offer in case that • Clarifications of regulations govern-
concessions. throughout the selection process it ing additions to contracts, including
The former law had two actors: the doesn´t win. With these private initia- a limit of 20% during the life of the
Government and the Engineering Com- tives, the ANI is aiming to cover the contract.
panies, the new PPP law includes a third most beneficial and innovative propos-
actor in a protagonist role which is the als from the private sector. Within the ANI, there is a Vice-Presi-
investors such as infrastructure funds and The most important features of the dency (Vicepresidencia de Planeación,
pension funds. new PPP law are the following: Riesgo y Entorno) responsible for de-
veloping pre-feasibility studies and
In terms of laws and regulations
administering, evaluating and identify-
ing risks of PPP projects. What sort of
risk transfer are you planning for your
that protect investors, Colombia PPPs? Given that much of the program
is focused on economic infrastructure,
do you plan to transfer volume/demand
is widely recognized as an investor risk to the private sector?
friendly environment. The general criteria for risk transfer will
be that risk should be borne by the party
who is in the best position to manage it.
Accordingly, construction and availabil-

12. 12 Latin Infrastructure Quarterly Institutions
ity risks will be transferred to the conces- Can you comment on the Fondo Finan- ects and support their preparation phase.
sionaire, except in complex works, such ciero de Proyectos de Desarrollo (“Fon- Now we have two other funds such as the
as long tunnels. ade”) as it seems to be one of the main Calamity Fund and the Adaptation Fund
The Volume/Demand risk was mostly sources of financing for road projects? - recently created especially for projects
absorbed by the government in the last related to recovering damaged transpor-
road PPPs - Ruta del Sol and Transversal Fonade stands for Financial Projects´ tation infrastructure due to the strong
de Las Americas. The government agreed Development Fund and it is an industrial winter season of the past two years.
to pay the shortfall, if any, relative to the - commercial financing company of the These three funds cover the whole nation-
initial revenue projections, at the end of state attached to the National Planning al territory through their lines of services
the contract. The Concessionaires took the Department. It was the only state com- which include project management, in-
risk of the revenue distribution over time. pany with judicial, technical and financial vestment banking and project structuring,
We will rely on the advice of our invest- faculties to negotiate development proj- formulation and evaluation.
ment bankers as to whether we maintain
this scheme in the new concessions.
The new PPP
law also has a
new incentive
for the private
sector to
present private
construction
initiatives for
those projects
that can be
fully financed
by a private
proponent and
do not require
public funds.
Regarding “Force Majeure”, the gov-
ernment will retain only those risks that
cannot be insured in the markets. Pareira, Colombia

13. Institutions Latin Infrastructure Quarterly 13
How is your pipeline of projects fed?
The projects are prioritized in the Nation-
al Development Plan (for a Presidential
term – 4 years) and this Plan is constantly
designed by all the planning offices of the
ministries involved in each sector togeth-
er with the National Planning Department
(DNP).
After the President of the Republic
takes office and the national budget is de-
termined for each year, those projects that
need to be financed through Public Pri-
vate Partnerships are sent to be structured
by the ANI.
The ANI is also in charge of all the
transportation sector concessions that are
about to revert to the state, we structure
them to put out to bid for another term
or if it is the case we analyze whether an
extension may be granted to the current
Concessionaire.
Can you comment on particular proj-
ects in the port and airports sectors
currently under study or being ten-
dered?
We grant concessions to bidders who re-
quest the least financial assistance from
the federal government to build, operate,
and maintain new highways, ports, air-
ports and railways. We also use Project
Finance Initiatives with which the gov-
ernment grants a concession to a private
company to design, finance, build, main-
tain, and operate a road, port or airport
again awarding it to the bidder who re-
quests the least amount of federal fund-
ing, and the government pays them an
amount that includes the amortization of
the investment plus the amount necessary
for the maintenance of the road.
With respect to airports the conces- Luis Fernando Andrade Moreno, is the President of the National Infra-
sions were formerly under the Aeronáu- structure Agency for Colombia (Agencia Nacional de Infraestructura)
tica Civil but with the new PPP law they since August of 2011, appointed by President Juan Manuel Santos, after
are in the process of passing to the ANI. having presided successfully the consultancy Mckinsey & Company
Colombia, the most important of the country, for almost 17 years. In
that period, Mr Andrade advised the reorganization of the most im-
portant companies in the country. He has also been partner of Mck-
insey & Company in Sao Paulo, Brazil, and associate consultant for the
same firm in New York. His career includes also an opinion column on
management and business reorganization for the magazine Dinero, the
most important of Colombia on the issues of finance and business. He
is an industrial engineer from the University of Florida, with an MBA
from Wharton School of the University of Pennsylvania.

14. 14 Latin Infrastructure Quarterly Infrastructure Financing
What’s your job as Vice-President of At Bancolombia´s investment bank- How do you see the MILA benefiting
Origination at Banca de Inversión ing division, over the years we have infrastructure financing? Is your Bank
Bancolombia? developed the expertise to advice, act looking at infrastructure projects in
as lead arrangers and bookrunners on a Peru or Chile?
I lead the origination team in charge of great amount of financing deals on in-
getting mandates for M&A, Project, Cor- frastructure. We have the largest team We believe that there is going to be a
porate and Acquisition Finance, and Cap- in Colombia with the sophistication and positive impact on the mid-term. The par-
ital Markets. The Bancolombia´s invest- technical knowledge to undertake any ticipation of the capital markets is critical
ment bank division has a regional reach, infrastructure deal. Also, having the bal- because given the number of new projects
covering deals in Colombia, Peru, Central ance support from Bancolombia, which is needed to improve our infrastructure, the
America and the Caribbean. Colombia´s largest bank, gives us and our amount of funding they require and the
clients the certainty that we can deliver. tenors of the loans, local and regional
Can you give us your opinion on the The reasons we see as competitive banks will have to work together with in-
state of infrastructure investment in advantages over large international stitutional investors to find ways to allocate
Colombia? banks are: being close to our clients, capital more efficiently. Having the MILA,
understanding their needs and the lo- with a more liquidity and a larger inves-
Colombia needs desperately to improve cal environment, flexibility and speed tor base will definitively be very important
its infrastructure if it wants to be com- to execution (being able to reach finan- once the appropriate debt instruments are
petitive in globalized economy. The most cial closing before). However, given the developed (in the case of Colombia).
The role of investment
banks in Colombian
infrastructure Managing Director at the
LIQ talks to Jean Pierre Serani,
development
Investment Banking Division
of Bancolombia.
critical problem is in our national and re- size of some of the infrastructure deals What is your opinion on the public
gional roads and public transportation on in Latin America, sometimes we need to sector agencies/ministries in charge of
the main cities. But we also need large partner with some international banks, bringing to market infrastructure proj-
investments on ports and airports. The with which we have developed a close ects? What things are they doing well
country needs to undertake large invest- relationship. and what things can be improved?
ments if we aim to catch up with other
countries on the region such as Mexico
and Chile. The reasons we see as competitive
The amount of work financing infra-
structure development Banca de Inver- advantages over large international
sión Bancolombia has done over the years
is impressive, why would project spon-
sors choose a domestic investment bank banks are: being close to our clients,
over a major regional or international
one? Please describe your competition in understanding their needs and the local
the fields of corporate finance and capital
markets. environment, flexibility and speed to
The fields in which we are focused
are project finance, acquisition finance, execution.
restructuring, M&A, private equity and
capital markets.

15. Infrastructure Financing Latin Infrastructure Quarterly 15
The participation
of the capital
markets is critical
because given the
number of new
projects needed
to improve our
infrastructure, the
amount of funding
they require and
the tenors of the
loans, local and
regional banks
will have to work
together with
institutional
investors to find
ways to allocate
capital more
efficiently. Medellin, Colombia
The current government has been very ity (budget, people); and to promote the to adopt international project finance
keen in understanding how the infra- development of a legal framework to ex- standards for local deals. This is a pro-
structure contracting could be improved pedite the acquisition of the required land cess in which we are converging progres-
and we expect to see the results on the rights needed to develop the projects. sively. With this, we expect to have in the
next generation of concessions that are near future some kind of standardization
planned to be awarded on 2013. Over the last five years, Banca de In- on terms and documentation.
The first step to improvement has to be versión Bancolombia has structured In Colombia, international banks are
taken by the government agencies (ANI) various syndicated loan transactions to very active in deals that involve sectors
to develop contract terms that fit inter- finance infrastructure companies, were that get income denominated in US dol-
national standards on both technical and there common characteristics in those lars (ports, airports, energy). Projects in
financial requirements for sponsor and loans and were there foreign lenders toll roads or public transportation have
contractors. Also the government needs to participating? peso denominated income, so its financ-
focus on two other issues: strengthen the ing is mostly provided by local banks or
other agencies like the ANLA (in charge All deals have been tailor made, so mak- international banks with a local opera-
of awarding environmental licenses) in ing comparisons is difficult. I could say tion).
order to add them more execution capac- that in the last years there has been a trend Banca de Inversión Bancolombia has

16. 16 Latin Infrastructure Quarterly Infrastructure Financing
In Colombia, international banks are very
active in deals that involve sectors that get
income denominated in US dollars (ports,
airports, energy).
also invested its own capital in operators other members of the consortium, con- tion that has allocated a good portion of
of infrastructure assets, what are the main cession agreement, granting authority’s its portfolio (of close to USD300 million)
elements of an infrastructure asset opera- rights and obligations, permits, project’s in infrastructure assets. Being a finan-
tor that you consider when evaluating an main risk management provisions when it cial investor the most important element
investment? (for example: sponsor’s op- comes to construction and operation). besides the attractiveness of the asset is
erating expertise and equity commitment, We have a merchant banking opera- to find the right partner (usually an in-
frastructure manager or a construction
company). This partner should provide
the expertise as a sponsor and construc-
tion manager, and also it needs to share
the same values and philosophy towards
managing the asset, even though the roles
and expectations are usually different.
Let’s now turn to the capital markets
and discuss the interest from insti-
tutional investors for bonds of infra-
structure related issuers, what were the
recent issuances in which you partici-
pated?
So far, in Colombia there have not been
local project bonds. Most of the experi-
ence comes from some foreign issuances
to fund greenfield energy assets (thermal
power plants) or local issuances from
operating projects or infrastructure com-
panies. Currently, in Colombia, the gov-
ernment is on the process of developing a
new asset class to finance infrastructure.
This process is on early stage, and we
expect to have the final instrument (with
the input from all the parts: institutional
investors, banks, sponsors and govern-
ment) next year, when the new generation
of concessions are to be awarded.
In those deals, were the institutional
investors buying those bonds primarily
domestic or is there interest from inter-
national investors as well?
Since the government is improving both
Villa de Leiva, Boyaca, Colombia the terms and requirements to award the

17. Infrastructure Financing Latin Infrastructure Quarterly 17
next generation of concessions, and de-
veloping a new asset class to finance in- Jean Pierre Serani is a Managing Di-
frastructure, we hope that we will have rector at the Investment Banking Di-
the right framework to attract local and vision of Bancolombia since August
international institutional investors. 2011. In this position he is in charge
of leading the origination team for
What do institutional investors look for M&A, Project, Corporate and Acqui-
in those bonds? (for example: rating, sition Finance, and Capital Markets.
currency, interest rate, security pack- The Investment bank has a regional
age, applicable law, market in which reach, covering deals in Colombia,
the bonds are traded, particular cov- Peru, Central America and the Carib-
enants) bean. Before becoming a Managing
Director, Mr. Serani was a Director of
During our conversations with local in- Corporate Finance, Senior Associ-
stitutional investors about the character- ate and Associate at the Investment
istics of the new instrument that the gov- Banking Division of Bancolombia.
ernment is designing, the main concern Prior to joining Bancolombia, Mr.
is how to address construction risk and Serani worked as a portfolio man-
availability payments from the govern- ager in charge of Corfinsura´s Co-
ment. There is still a long way of discus- lombian Treasury Bonds portfolio
sions, but we believe that instrument will of over $200 million (Corfinsura was
need to incorporate credit enhancements Colombia´s main Investment Bank
such as the ones provided by monoliners, and it was acquired by Bancolombia in 2004).
multilaterals or a government agency in Mr. Serani received his undergraduate degree in Business from Universi-
order to mitigate these risks. dad EAFIT and his MBA degree from Georgia Institute of Technology.

18. 18 Latin Infrastructure Quarterly Institutions
What would you tell an investor whose Colombia has the potential to be one
The view from Canada views are built based on the bad news
that came from Colombia all through
the 80’s and 90’s? Is Colombia 2012 a
of Latin America’s great success stories.
Investors have to start seeing us like an
emerging power with a diversified econ-
safe place to invest? omy, with a growing middle class and a
strong democratic government.
The media continues to portray the ste- To conclude, I would tell an investor
reotype and fails to present the true pic- what executives of foreign companies
ture of what really takes place in Colom- with operations in Colombia have told
bia today. During the 1980s and 1990s me: go, visit the country and see yourself
Colombia was known for its drug cartels that now is the time to invest in Colombia.
and the guerrilla conflict and it is true that
many investors still continue to have this Please tell us more about the Canada-
Trivino, President of the Canada-Colombia
image in their heads. Colombia Chamber of Commerce.
What some investors have not realized What are its goals?
is that Colombia has been changing; now
the country is recognized by experts as The Canada Colombia Chamber of Com-
one of the world’s most dynamic econo- merce is an independent non-profit orga-
Adrián Barrios of PwC talks to Andrés
mies, with a robust democracy, healthy nization established here in Canada with
institutions, social progress and full re-
spect for the rule of law.
The serious security problems we suf-
fered are a thing of the past and now Bo-
Now the country
gota is considered safer than Washington.
Colombia’s has grown at a rapid pace and is recognized by
its current economic environment ranks as
one the best countries for investment and is experts as one
among the region’s best performers.
Historically, economic stability has
been Colombia’s differentiating advan-
of the world’s
tage when compared with other countries
in Latin America. Inflation has been held most dynamic
within single digits (2.3% in 2010), we
economies, with a
Chamber of Commerce
have not defaulted on our debt, exports
have quadrupled over the last seven years
and Foreign Direct Investment (FDI) has
boomed since 2001. This latter growth
robust democracy,
was primarily originated by the expansion
of the oil and gas industry in the country. healthy
It is important to note that this growth will
only be sustainable if Colombia builds the institutions, social
network of highways, railroads, airports
and ports necessary to support the new
activity. As a result, infrastructure will be
progress and full
one of the most important drivers to take
Colombia to the next level. respect for the
The World Bank recognizes Colombia
as one of the most business friendly envi- rule of law.
ronments in Latin America. Colombia has
made important progress evolving its reg-
ulation meant to incent both foreign and
domestic investment. Today, the country
ranks first in Latin America in terms of the purpose of fostering business rela-
investor protection and fifth in the world. tions between the Canadian and Colom-
All three rating agencies have upgraded bian business communities.
the country to investment grade. Our main goal is to promote and facili-

19. Institutions Latin Infrastructure Quarterly 19
tate investment and trade for and between Our top priority at this point is to pro- (ANI), responsible for packaging and
members and support communication mote Colombian infrastructure projects to promoting infrastructure projects to the
with industry and government organiza- the Canadian business community. We in- private sector. This seminar will be an
tions. Our objective is also to support so- troduce investors interested in our coun- opportunity to hear firsthand the oppor-
cial progress through programs aimed at try and assist them in obtaining appro- tunities for private sector participation in
helping Colombians in need. We pursue priate information; making contact with the Colombian government’s ambitions
our objectives by developing and enhanc- government officials and local partners. infrastructure plan. During that week the
ing contacts, and making their voices We do this either directly or through Co- ANI will also be meeting with key Ca-
heard through our events and publica- lombia’s foreign investment promotion nadian investors, hedge funds, pension
tions. agency Proexport. We also work closely funds, infrastructure companies, engineer
Our events have brought together de- with the Department of Foreign Affairs companies, construction firms and ser-
cision makers, high-level representatives and International Trade Canada. vices providers interested in learning in
from business, government and academia. We actively host and participate in more detail about the recently launched
We also organize international missions, various Infrastructure events and trade 4th generation highway PPP projects and
which are the ultimate vehicle to achieve missions in Canada and Colombia. We prequalification procedures, as well as the
results. are hosting an exclusive event in To- standardized PPP and infrastructure bond
Our chamber keeps close ties with key ronto on November 28th with the newly term sheets.
stakeholders, primarily in Mining, Oil created National Infrastructure Agency
and Gas, and Infrastructure. We have also
Our top
priority at
this point is
to promote
Colombian
infrastructure
projects to
the Canadian
business
community.
developed some connections with large-
scale finance and project management,
engineering, professional services and
sustainable construction.

20. 20 Latin Infrastructure Quarterly Institutions
Are there international companies pro-
The government’s plan involves viding infrastructure services in Co-
lombia? Which countries are currently
new inter-departmental
represented?
Various international private equity firms
highways, ports and airports have focused on Colombian infrastruc-
ture and opened operations in Bogota.
Brookfield is a good example as it has put
as the primary element in the together a $400M million infrastructure
fund. By the way, this is the largest pri-
quest to make Colombia more vate equity and infrastructure fund ever
raised in Colombia. Other international
competitive.
private equity funds active in Colombia
are Ashmore, SEAF, Darby and the Swiss
Investment Firm for Emerging Markets
“SWIFEM”.
We are also helping the Department of SNC-Lavalin, Nexen, Scotiabank, Petro- In 2011 SNC-Lavalin acquired Itansuca,
Foreign Affairs and International Trade bank, Air Canada, Continental Gold, Bata a Colombian engineering firm focused on
(DFAIT) to promote the Infrastructure Footwear, Kruger Paper, Enbridge, Presi- the energy sector. Odebrecht, form Brazil,
trade mission to Colombia, Peru and Pan- dents Choice, McCain Foods, LaSalle is currently working on the construction and
ama with primary focus on energy, trans- College, and Mcleod Dixon. concession of the second sector of “Ruta del
portation and water. The mission will take Canada’s FDI to Colombia is focused Sol”, a road that will effectively run from
place on November 11-16. primarily on the extractive sectors. Co- Bogotá to the Caribbean coast. Other im-
If you are interested in knowing more lombia’s mining and energy sectors re- portant Infrastructure and Construction
about our chamber, events, trade missions, ceived about $12 billion in FDI in 2011, firms are Acciona from Spain, currently
services and how to become a member making it the largest FDI recipient coun- working on water sanitation and Camargo
I encourage you to visit our website at try in Latin America as a proportion to its Correa, another Brazilian company also set-
www.canadacolombiachamber.org. gross domestic product. ting sights on our country.
As well, many Colombian extractive
What are the main Canadian compa- companies are listed in Canadian Stock Please tell us about infrastructure op-
nies (e.g. mining) that currently invest exchange. By the end of April, there were portunities in Colombia. What are the
in the region? five dual listings between Toronto Stock current priorities for the Government?
Exchange and Bolsa de Valores de Co-
Colombia’s strengthening economy, has lombia. There were 19 companies listed During the past two decades Colombia
helped create ideal conditions for high and on Toronto Stock Exchange and 43 com- failed to invest in Infrastructure, to the
sustained growth, becoming a strategic panies listed on TSX Venture Exchange extent that investment in this sector ac-
destination for Canadian companies, espe- with operations in Colombia. counted for only one per cent of GDP,
cially in oil & gas, mining, manufacturing Canadian companies are also invest- which is much lower than the three per
and financial services. ing significantly in other sectors such as cent that is touted as the right percentage
Many Canadian companies are current- financial agricultural, pulp and paper, for developing countries. This said, is evi-
ly active in Colombia such is the case of printing, shoe manufacturing, plastics, dent that there are plenty of opportunities
Talisman Energy, Pacific Rubiales, Petro- education and forestry. in this sector.
minerales, Brookfield Asset Management, Looking into where investment is likely
to go, it is relevant to remember that in-
It is relevant to remember that frastructure is one of the 5 key sectors for
economic growth identified by President
Santos’ strategy. The other four are hous-
infrastructure is one of the 5 ing, mining and energy, agriculture and in-
novation.
key sectors for economic growth Improving the country’s weak trans-
portation infrastructure is the governments
identified by President Santos’ top priority as the country enters into a
new phase of international trade which de-
strategy.
mands more capacity. With 11 free trade
agreements in effect, it is obvious that
demand for better infrastructure is on the

21. Institutions Latin Infrastructure Quarterly 21
process. This is meant to create confi-
dence and transparency for private-sector
involvement.
Currently ANI is working together
with the Colombian ministry of Finance
creating a new bond instrument that
will increase the market’s liquidity. Us-
ing these bonds pension funds will have
access to investment in infrastructure
projects.
Andres Trivino is the President
of the Canada-Colombia Cham-
ber of Commerce in Canada
with a primary role of offering
an independent voice to pro-
mote investment and trade be-
tween the two Countries. With
more than 15 years of profes-
sional experience he worked for
PwC Canada advising corpora-
tions in Canada, Colombia, Bra-
zil, Mexico, Venezuela, Cuba and
Dominican Republic. As part of
the PwC Latin American Re-
structuring Group and the Deals
and Consulting Group; he ad-
vised companies in Corporate
Finance, Corporate Restructur-
ing, Mergers and Acquisitions,
financial modelling and busi-
ness valuations. His experience
comprises the mining, energy,
financial services, telecom, en-
Cartagena, Colombia tertainment, and infrastructure
sectors. Andres can be reached
rise. The government has also set out four significant additional support of approxi- at atrivino@canadacolombia-
main directions for strategic planning in mately 30% of total investment from the chamber.org
terms of infrastructure projects: (1) sup- private sector through PPP to procure in-
port for internationalization, and “eco- frastructure and private investment. By
nomic locomotive” sectors; (2) regional 2014, the government expects to invest
connectivity; (3) adaptations for climate US$17bn to complete the four-lane road
change; and (4) urban mobility. network and 50 per cent of railways.
Foreign investors from Canada and Opportunities exist for roads, railways,
elsewhere are expected to play a sig- airports, water sanitation and power,
nificant role in upgrading Colombia’s among others. Colombia’s expanding oil
outdated infrastructure, to support the and gas industry has created the need for
increasing output from mines, oil wells, new pipelines to transport the crude and
agribusinesses and other investments sub-products to the ports.
The government’s plan involves new I think it is relevant to say that our
inter-departmental highways, ports and infrastructure sector is going through a
airports as the primary element in the transition period, founded on the creation
quest to make Colombia more competi- of the National Infrastructure Agency
tive. Colombia is expected to invest ap- (ANI), and the enactment of the Public–
proximately $55 billion in infrastructure Private Association Law, and the changes
over the next 10 years, which accounts for in the rules for the infrastructure auction

22. 22 Latin Infrastructure Quarterly Infrastructure Financing
Can you briefly describe the IDB’s
portfolio of social infrastructure proj-
ects in Colombia? Which are the main
ones?
T
he IDB covers social infra-
Colombia: structure projects in all of Latin
America and the Caribbean in
both public and private sector
sides. On the private sector side, we sup-
port health and education infrastructure
including the construction or expansion
of hospitals, clinics, schools, universi-
infrastructure
ties, and daycare centers. One example
is the Centro Médico Puerta de Hierro in
Mexico. IDB provided 12-year financ-
ing to help the company build two new
hospitals, 40 beds each, in the central Pa-
cific coast cities of Tepic and Colima. The
IDB credits, which combine senior and
development
subordinated loans, total $12 million,
denominated in Mexican pesos. Another
example is the Universidad Politécnica
Salesiana, a socially inclusive Catholic
university in Ecuador. IDB approved
a $15 million loan to finance its expan-
sion, including the construction of new
on social
buildings, purchase of equipment, and
the creation of a student loan fund. We
have identified interest in IDB financing
Insights
the construction and/or expansion of sev-
eral hospitals, clinics, schools and other
education projects to support Colombia’s
social infrastructure.
On the public sector side, the biggest
education projects approved within the past
18 months are a $46 million loan to Colom-
bia to reduce inequalities among schools
located in different parts of the country; a
$27 million loan for a program focused on
early childhood learning in Paraguay; a $25
million loan also for early-stage learning
in three provinces in Peru; and a $7 mil-
lion financing for initiatives in Honduras to
benefit schools serving the very poor. In the
areas of social protection and health, a $66
million loan to Brazil will improve the Uni-
fied Social Assistance System, including
programs to combat hunger; a $35 million
program to construct and upgrade hospitals
in the department of Potosí in Bolivia; and a
$50 million loan to Panama aimed at reduc-
LIQ talks to Kristin Dacey, Senior ing infant and maternal mortality and ad-
dressing chronic malnutrition and training
Investment Officer at the Inter-American physicians and nurses.
Moreover, the private and public arms
Development Bank of the bank work hand in hand to help

23. Infrastructure Financing Latin Infrastructure Quarterly 23
governments develop effective private- sectors and are continually in touch with receive financing from the Bank? If so,
public partnership frameworks that can local private sector players active in the in your opinion, how much politics in-
help generate a strong private sector re- social infrastructure space. fluences the granting of said guarantee?
sponse and attract quality investors in the
provision of high-quality services in our I assume the demand for projects is Loans to sub-sovereign entities do not
member countries. great, what is the Bank’s criteria, when require a financial guarantee from the na-
evaluating different projects, to go for tional government, but they do need their
Let start discussing the pre-investment one over another (long-term average non-objection. In making loans to pro-
phase, how is the Bank’s pipeline of cost, NPV, IRR)? vincial, state or municipal governments
projects fed? That is, who identifies without a sovereign guarantee, the Bank
possible projects: the Bank, the nation- One of the main criteria we use to evalu- thereby assumes a degree of risk not as-
al government, and/or the sub-national ate projects is the developmental impact sociated with sovereign-guaranteed lend-
governments? of the project its alignment with the IDB’s ing, and thus charges different rates of
goals. As part of a deliberate effort to ad- interest and develops terms different from
The IDB has offices in every country in dress sustainability issues in both private those applicable to sovereign-guaranteed
Latin America and the Caribbean, and and public sector projects and invest- projects, on a case-by-case basis.
uses this presence in the region to help ments, the IDB focuses on supporting
originate the “pipeline” of projects pro- client companies as well as governments Lets now turn to the investment phase,
posed for future financing. On the pub- to better balance the financial, social, and how does local procurement change
lic-sector side, priority areas are identi- environmental performance aspects of when a project is to be financed by the
fied through the preparation of Country their projects and operations. Bank?
Strategies, publicly available documents As noted above, project programming
prepared jointly by the Bank and borrow- on the public-sector side is done in con- The Bank ensures best practices are used
ing-member country authorities at the be- junction with governmental authorities. in all of our projects, as reflected in the
ginning of their terms in office. Because Calculation of rates of return, both eco- Bank´s procurement policies for good,
the IDB works closely with the national nomic and financial, is always included as civil works, and consulting services.
and sub-national governments, we some- part of project appraisal and due diligence. When Bank resources are used to finance
times receive referrals from them for a publicly administered bidding process,
private sector deals. The IDB also has Do sub-national governments need a the Bank´s rules require that the competi-
officers, like myself, who cover certain guarantee of the national government to tion be open to entities from all member

24. 24 Latin Infrastructure Quarterly Infrastructure Financing
On the public-sector side, priority areas are identified
through the preparation of Country Strategies,
publicly available documents prepared jointly by the
Bank and borrowing-member country authorities at
the beginning of their terms in office.
Bucaramanga, Colombia

25. Infrastructure Financing Latin Infrastructure Quarterly 25
countries, with local and international
advertising requirements. The Bank re-
serves the right not to finance activities
When Bank resources are used to
that do not adhere to Bank procurement finance a publicly administered bidding
policies.
How does the Bank monitor the pro-
process, the Bank´s rules require that
curement of projects?
the competition be open to entities
from all member countries, with
The IDB is very active in the monitor-
ing and evaluation of projects, princi-
pally through the Country Offices. Pro-
curement plans and general and specific local and international advertising
requirements.
procurement notices are disclosed on the
Bank´s website for all sovereign-guaran-
teed projects, as are contract award an-
nouncements.
Do you see social infrastructure pro- Last year, Colombia was raised to invest-
Onto the operation phase, besides the curement and operation changing with ment grade, has this led the national and
financing of works, does the Bank par- the PPP law recently enacted? sub-national governments to turn to the
ticipate in “capacity building” projects capital markets to finance infrastruc-
for the public sector officials at a na- Generally there is optimism. We have re- ture works? If so, has this decreased the
tional and sub-national level responsi- ceived a few calls to discuss ideas, which demand for Bank’s resources?
ble for executing the projects financed could be quite interesting. Colombia is
by the Bank? If so, can you describe the a dynamic growing market that has at- For social infrastructure, we have still
results these projects have had so far? tracted the attention of many investors. seen robust demand. Many of the proj-
It seems promising that the new law will ects are too small, or not the right fit for
Yes. The vast majority of Bank fi- allow more of the private capital to flow capital markets. At the same time com-
nanced sovereign-guaranteed loan into much needed infrastructure projects. mercial banks can’t offer the tenors that
projects contain institutional capac- The PPP law is very recent and some make sense for social infrastructure proj-
ity-building components, which are work still needs to be done with respect to ects. The IDB has worked hard across the
continuously monitored and evalu- the interpretation of certain elements, but region to identify the right mix of financ-
ated throughout the implementation we are hopeful that IDB’s work will sup- ing partners to achieve tenors and financ-
phase. Capacity-strengthening is also port the creation of innovative approaches ing packages that promote social infra-
accomplished through technical as- that align with the law and its objectives. structure investment projects.
sistance grants provided by the Bank,
and through the innovative Social En-
trepreneurship Program administered Kristin Dacey is a Senior Investment
by the Multilateral Investment Fund, Officer originating social private
which combines grants and small-scale sector projects, mainly in health and
loans to non-governmental organiza- education, for the Structured and
tions, always including a capacity- Corporate Finance Department of
building dimension. the Inter-American Development
Bank (IDB). Previously, Kristin spent
In your opinion, what are the main les- over 4 years syndicating IDB private
sons learned from developing social in- sector loans covering financial mar-
frastructure in Colombia? kets, corporates, structured finance
and the socioeconomic base of the
There is a great need for social infrastruc- pyramid. Prior to the IDB, Kristin
ture in Colombia with many projects suf- spent almost 7 years at GE Capital
fering from lack of equity and/or sponsor in various roles, business lines in the
support to get started. Many existing US and Mexico. Kristin has a Masters
projects in the health space suffer from in Global Management from Thun-
long accounts receivable cycles. Both of derbird, MBA from Arizona State,
these aspects need to be mitigated care- as well as a BS and BA from Virginia
fully in structuring of the financing pack- Tech.
ages.

26. 26 Latin Infrastructure Quarterly Regulation
Although Colombia has a
long history of infrastruc- Public Private Partnerships:
A New
ture projects privately
financed, the concept of
Public Private Partner-
ships (PPPs) is completely
new for its legal system.
Previous projects were
developed in the country
under the concession con-
tract model, a legal institu-
Concept
for the
tion taken from the French
law in which the private
part delivers a service on
behalf of the State. In that
Colombian
kind of contracts, the pri-
vate part is not meant to
be a partner of the State,
but its delegate.
Law Carlos Andrés Sánchez García
Durán & Osorio Abogados
U
nder this model, the State re- the first article of the mentioned Law de- public organisations are not allowed part-
mained as the last responsible fined PPPs as follows: nering even with partially State-owned
for the public service deliv- “Public Private Partnerships are an corporations even tough those were in-
ered through the concession instrument for private capital participa- corporated under private law. In that par-
and therefore, Courts were always reluc- tion, materialised in a contract between ticular topic, both Constitutional Court
tant to accept risk allocation as described a public entity and a person or a private (2007) and Council of State (2011) have
in contracts, making the State liable for law corporation, in order to provide pub- been reiterative about the public nature
what they called “unforeseeable risk”. lic infrastructure and the services related of corporations with public shareholders,
As a consequence, concession contracts to it. It involves risk retention and trans- regardless the amount of the equity held
were heavily controlled by the State, giv- ferring as well payment systems based on by them.
ing little freedom to the private party for the availability and service level of the Private Capital Participation: The
developing new and more efficient ways infrastructure provided or the service de- fact that the private party is in charge
to deliver infrastructure and public ser- livered.” of financing the whole project is almost
vices. In fact, the concession model as- Based on that definition, it is possible unanimously considered as a key element
sumes that the State knows what it needs to identify the following elements as es- of PPPs (United Nations, 2008, European
and how to do it, but prefers to rely on sential for Colombian PPPs. Commission, 2005 and HM Treasure,
private efficiency executing the required Parts: Contract parties must be a pub- 2003). The Colombian model does not ac-
tasks. Unfortunately, such an assumption lic organisation and a private partner, and cept either sharing equity between public
is frequently far from reality. in consequence, unlike some European and private partner –mixed equity corpo-
In that context, Law 1508 is a break- jurisdictions where public organisations rations have their own legal framework
through for Colombian infrastructure. can partner State owned corporations and consequently are a different way of
Learning from its own experience and (e.g. Institutional PPPs under Spanish public-private cooperation– or soft loans
considering international good practices, law), (Rebollo Fuente, 2009), Colombian or grants from the government, making