Category: Colombia

Colombia’s Central Bank raised the benchmark lending rate by a quarter of a percentage point to 8.0% on Friday, to slow accelerating growth and stave off inflationary pressures. Last month the Bank also lifted rates a quarter of a percentage point from 7.50% to 7.75%. Earlier this month, the finance ministry said that Colombia’s economy grew by around 7% last year, and perhaps as much as 8% in the last quarter, driven by domestic demand and private investment. The Central Bank is targeting inflation of between 3.5% and 4.5% this year.

The central Colombian province of Cundinamarca, which surrounds the country’s capital Bogotá, is to issue 10-year bonds worth up to $60 million (134 billion pesos). The money raised will fund development programs in the province. The sale will be led by Interbolsa and Asesores en Valores.

Peru’s state-run oil concern Petroperú and its Colombian counterpart – Ecopetrol – have signed a cooperation agreement that embraces the growing area of alternative biofuels energy, hydrocarbons exploration, production and refining. The two companies signed a five-year Memorandum of Understanding on Tuesday and will establish an executive committee to analyze specific joint agreements. No details of amounts to be invested were offered.

Global energy company Ashmore Energy International (AEI) and Colombian natural gas distributor Promigas have agreed to buy 100% of Peruvian natural gas distribution business Calidda from French power company Suez. The acquisition adds to AEI’s energy infrastructure assets in the region. AEI is a majority shareholder in Promigas. Meanwhile, AEI has entered into an agreement to sell its 51% indirect stake in Bahia Las Minas, a Panamanian generation company, to Suez Energy International. AEI agreed to the divestiture of the company to comply with Panama’s anti-trust laws after it bought Prisma Energy last September. It also owns electrical distribution company Elektra Noreste. AEI gave no financial details of the transactions.

Colombia’s foreign minister, Maria Consuelo Araújo Castro, resigned on Monday following mounting pressure to step down following the arrest of her brother, Senator Alvaro Araújo Castro, on charges of links to right-wing paramilitary groups and involvement in kidnapping. The minister’s father, Alvaro Araújo Noguera, a former provincial governor, is also under suspicion and may be investigated. President Alvaro Uribe has named Fernando Araújo Perdomo (no relation to the former foreign minister), recently freed after six years of captivity by the FARC, as her replacement. He had served as Development Minister under the administration of Andrés Pastrana.

Colombian power generating company Emgesa, part of Spain’s Endesa, is to issue $76.5 million worth (170 billion pesos) of local bonds according to the company. The proceeds raised from selling the 10-year bonds will be used to pay down existing debt. Emgesa offered to pay investors a maximum yield of the consumer price index plus 5.30 percentage points. Citigroup in Colombia will handle the sale.

Colombian largest food retailer Almacenes Exito has acquired a further 52.4% of rival Carulla Vivero to take its total stake to 72.2%. Exito bought around 18.5 million shares of Carulla for $292.4 million in an open auction that ended on Friday to add to the 19.8% of Carulla it already owned. Meanwhile, chief executive of Exito, Gonzalo Restrepo, said his company would launch another tender offer for the remaining 27.8% shares in the company, most likely in April.

Oscar Iván Zuluaga, a presidential advisor to President Alvaro Uribe, has been named the new finance minister of Colombia. He replaces Alberto Carrasquilla, who tendered his resignation last month. Although the 50-year old economist has served as a senator (2002-2006), most of his experience has been in the private sector, including a post at the head of Acerías de Colombia. Zuluaga has a tough act to follow and most expect him to stick closely to the policies implemented by Carrasquilla.
Meanwhile, pressure mounts on foreign minister Maria Consuelo Araujo to resign following the arrest last week of her brother, Senator Alvaro Araujo, on charges of links to paramilitary groups.

Oscar Iván Zuluaga is the most likely replacement for outgoing finance minister of Colombia, Alberto Carrasquilla, according to local media reports. The appointment is seen as a departure from the norm. The 50-year old economist was appointed presidential advisor last August, but most of his experience has been in the private sector, including a post at the head of Acerías de Colombia. He was elected a senator in 2002 but didn’t contest a seat in the most recent elections in order to help with Uribe’s re-election campaign.

Colombia’s economy grew by around 7% last year, and perhaps as much as 8% in the last quarter, according to finance minister Alberto Carrasquilla. Earlier this week, the central bank governor, José Darío Uribe, said that GDP had grown by 7.7% in the final quarter of last year, driven by domestic demand and private investment. The official statistics bureau DANE is due to release the official figures in the next few weeks.