UK-based consultancy Arup has given notice that Goldman Sachs has reached financial close on the ground-breaking Pacifico 3 highway project in Colombia.
Arup served as advisor to the lenders on the project, a milestone of public-private partnerships (PPPs) in the South American country.
The $648m financing of the Pacifico 3 highway project is the first to reach financial close in Colombia’s ambitious fourth generation (4G) infrastructure programme.
Pacifico 3 encompasses the improvement and construction of 146km of roads, including a 3.4km tunnel and approximately 1.7km of bridges and viaducts, to connect the regions of Antioquia, Caldas, and Risaralda.
Following construction, the sponsor will operate the project for 25 years.
Arup guided the lenders’ decision-making and deal-structuring process by providing analysis of the key commercial, engineering, construction, environmental, and operations risks.
The financing for the project includes a $260m bond issued pursuant to Rule 144A and Regulation S of the US Securities Act, the first overseas bond for a Colombian toll road, Arup announced.
Colombian President Juan Manuel Santos acknowledged the bond as a sign of confidence in the government’s infrastructure efforts.
In 2013, the Colombian government launched the 4G road concession programme, the most ambitious infrastructure development programme ever undertaken in Colombia.
It aims to build, repair, and upgrade 8,000km of national roadway with an expected investment of approximately $25bn.
Arup won seven of the first nine available independent engineer contracts awarded in the first round of tenders.
In 2014, the Colombian government awarded nine concessions to private developers to design, build, finance, operate, and maintain (DBFOM) approximately 1,110km (690mi) of roadways.
Photograph: Future site of one of the new toll roads – the Pacifico 1 – planned under Colombia’s 4g infrastructure plans (Arup)