IDB, CAF Tee Up Colombia Fund

The IDB and CAF have signed a letter of intent to help Colombia establish an infrastructure fund worth $500m initially. The idea is for the fund to be rolled out within the next 12 months, an IDB official tells LatinFinance, depending on the severity of the credit markets. The two multilaterals are expected to take a 25% stake in the fund, which will be used to channel pension fund money into infrastructure and take equity to stimulate private sector interest. Some 25% should come from the government and the balance from local pension funds and insurance companies. It will be deployed preferably as equity and prioritize transport and water/waste. The first investment is likely to be financing the Ruta del Sol, says a senior government source. That project may well be integrated into a single venture. Earlier this year Colombia’s finance minister Oscar Ivan Zuluaga said the government wanted a program roughly along the lines of Mexico’s Fonadin, where the public and private sectors could put money together to fund projects. Colombia aims to spend about $38bn for infrastructure between 2007-2010, eyeing some $18bn from private sources.