44984 - FCP 4G Credicorp Capital and Sura Asset Management Fund 2

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Summary of Investment Information

Project Number

44984

Company Name

FCP DEUDA INFRAESTRUCTURA II SURA - CREDICORP CAPITAL

Date SPI Disclosed

Nov 17, 2021

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Jan 17, 2022

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Apr 15, 2023

Department

Regional Industry INF LAC & EUR

Industry

other

Previous Events

Approved : Jun 3, 2022
Signed : Jan 27, 2023
Invested : Apr 12, 2023

Sector

Other Non-Fund

Additional Project Attributes

Public-Private Partnerships

Project Description

The proposed project entails an IFC equity investment of up to US$40m equivalent in COP (COP$150,000m) or up to 20% of the total commitments, as limited partner in an infrastructure debt fund managed by Unión para la Infraestructura S.A.S. (“UPI” or the “Manager”). This will be an IFC follow-on investment in compartment A of UPI’s second debt fund (the “Second Fund” or the “Fund”). The Second Fund will be earmarked to finance toll-roads and airports projects under the 4G and 5G infrastructure programs in Colombia (the “Project”). In December 2015, IFC committed COP$150,000m (US$48m) in UPI’s first debt fund (the “First Fund”), which provided senior debt financing to four projects under Colombia’s 4G toll-road concession program.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	40.0

Development Impact

The Project has an Anticipated Impact Measurement and Monitoring (AIMM) rating of Satisfactory. The most significant, expected project-level outcome comes from the improved access to road infrastructure and it supported by the improved quality of finance for infrastructure projects through the provision of longer-tenor funding. Beyond the Project, IFC anticipates that the investment will promote competitiveness by fostering the creation of infrastructure debt funds as an investible asset class for institutional investors with a long-term focus and a complementary source of funding for infrastructure projects through demonstration and replication effects.

In this Project, IFC is providing both financial and non-financial additionality through the provision of equity, resource mobilization, and standard-setting. IFC's Own Account Equity: IFC will provide a direct equity investment of up to US$40 million. The Second Fund is expected to have on its investor base some of the largest pension funds and insurance companies in Colombia. While commercial banks were active in the financing of the 4G projects that have reached financial close, by providing about 62% of the financing needs, their high level of exposure to the infrastructure sector, coupled with increasing constraints in offering long tenors due to Basel III capital restrictions and the impact of COVID-19, limits their appetite and availability of funding for infrastructure projects in Colombia going forward. Resource mobilization: IFC's role of anchor investor will help catalyze investments from institutional investors. Also, IFC's participation will encourage increased participation of local institutional players in the financing of infrastructure and increasing sources of local currency financing. Standard-setting: IFC's previous engagement with the Manager served to help the Fund to work on environmental and social matters. Additionally, in this project IFC will work with the client to strengthen its management of Corporate Governance risks when it conducts its due diligence during investment review processes and in its portfolio management.

E&S Category Rationale / Risks and Mitigation

The proposed project will support financing of toll-roads and airports sub-projects, both greenfield and brownfield, under the 4G and 5G Programs in Colombia. Most of the projects in the Fund’s pipeline are likely to be Category A/High risk. Such infrastructure sub-projects are characterized by a significant footprint and may involve impacts on biodiversity, Indigenous Peoples, vulnerable communities, involuntary land acquisition and/or resettlement, community and occupational health and safety (OHS). Impacts during land clearing, blasting, road management practices are also possible. In addition, Colombia hosts an extensive protected area network, which could be affected by some of the proposed road projects. Security Risks may arise from Insurgent groups that target infrastructure projects and local communities. The Project will not support investments involving activities described in IFC’s exclusion list and companies operating in the coal sector. The Project has been categorized as Category FI-1. The fund will be required to assess all sub-projects against the IFC Exclusion List, the applicable E&S laws and regulations of Colombia and the IFC Performance Standards.

The environmental and social assessment process outlines the following steps: 1) verify the exclusion list and reputational risks associated with the project, 2) E&S risk category definition; 3) Request information (permits and licenses, environmental impact studies, E&S management plans and programs, client management systems, among others. The Fund has a detailed list of documents that are required for E&S due diligence; 4) carry out the E&S due diligence, the ESMS defines the scope, topics, and specific tasks on material aspects of the Project, and the term of reference for the external consultants; 5) on-site visit; 6)The result of the environmental and social due diligence is presented in investment committees, where the identified risks and their possible mitigants are discussed, and finally an investment decision is made; 7) Finally, the system defines the conditions and deadlines for E&S monitoring of its operations. All operations are monitored on a quarterly basis. E&S due diligence and monitoring are based on IFC Performance Standards and compliance with legal requirements.

The ESDD and monitoring of each investment is supported by an external consultant (independent engineer) following detailed terms of reference provided by the Fund.

S.no	Title	Anticipated Completion Date	Status
1	Other1 - ESMS enhancement and strengthening of the organization	11/30/2021	Completed
2	Other2 - E&S training	11/30/2021	Completed

Contacts

For Inquiries About the Project, Contact

Unión Para La Infraestructura S.A.S.
Adriana Gallego / Cristina Peláez
Directora Técnica / Directora Crédito
57 1 4320930
agallego@upli.co
Carrera 7 No. 71 – 21 Torre B Ofic. 1602 Bogotá, Colombia
Websitewww.upli.co

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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