Summary of Proposed Investment
Project Number
11519
Company Name
SOCIEDAD DE ACUEDUCTO ALCANTARILLADO Y ASEO DE BARRANQUILLA S A E S P
Date SPI Disclosed
May 24, 2002
Country
Colombia
Industry
Infrastructure
Projected Board Date
Jun 27, 2002
Status
Completed
Sector
Water and Wastewater Utilities
Department
Regional Industry INF LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Nov 20, 2002
Signed : May 7, 2003
Project Description
Grupo Empresarial Triple A is composed of three companies: the parent company - Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla S.A. E.S.P. (Triple A), the investment arm - AAA Servicios S.A. (AAA Servicios), and the procurement arm - Gestion Integral de Suministros Ltda. (GIS). Triple A has a turnover of US$74 million, net profit of US$8.9 million and assets of US$154 million (for the year ending December 31, 2001). Triple A has been undertaking the Suroccidente project to extend water and sewerage services to the south west (Suroccidente) part of Barranquilla, which is the poorest part of the city. This investment is part of a 20-year concession, which has been duly extended for 20 years until the year 2033, to provide water, sewerage and solid waste services to the city of Barranquilla, the fourth largest city in Colombia, with a population of 1.5 million. The investments will be used for expansion of the network and sewage treatment. As a result, 350,000 low-income inhabitants, shall be connected to the network. Water and sewerage coverage for Barranquilla as a whole, will increase from original levels of 93% and 74% respectively, to 99% for water and 96% for sewerage.
The project consists of a corporate financing package for Triple A through a proposed credit enhancement of a Peso bond to be issued by the company. The proceeds of the bond will be used to retire bridge debt, that was used to finance Triple A''s investments in water and sewage infrastructure in the city of Barranquilla, mostly represented by the Suroccidente project. The proposed project will be among the first in which IFC provides a partial credit guarantee in Colombia. The partial guarantee would allow the company to obtain significant benefits and reduce project risks by lowering cost of borrowing, extending maturities, matching debt service obligations to project cash flows, and reducing currency risk, thus providing an instrument which will satisfactorily address several of the issues which are traditional risks for financing the water and sanitation sector. This issue would therefore contribute towards deepening the Colombian capital market''s capacity for longer term financing, particularly for new sectors such as water, wastewater, and solid waste management. IFC''s support will also help a newly emerging, high caliber multi-utility (water, wastewater and solid waste) company with a regional focus in Latin America to gain the size and visibility of an international player in a market dominated by a few large firms, by providing a financial instrument with wide applicability in the water and sanitation sector, throughout emerging market countries.
The project consists of a corporate financing package for Triple A through a proposed credit enhancement of a Peso bond to be issued by the company. The proceeds of the bond will be used to retire bridge debt, that was used to finance Triple A''s investments in water and sewage infrastructure in the city of Barranquilla, mostly represented by the Suroccidente project. The proposed project will be among the first in which IFC provides a partial credit guarantee in Colombia. The partial guarantee would allow the company to obtain significant benefits and reduce project risks by lowering cost of borrowing, extending maturities, matching debt service obligations to project cash flows, and reducing currency risk, thus providing an instrument which will satisfactorily address several of the issues which are traditional risks for financing the water and sanitation sector. This issue would therefore contribute towards deepening the Colombian capital market''s capacity for longer term financing, particularly for new sectors such as water, wastewater, and solid waste management. IFC''s support will also help a newly emerging, high caliber multi-utility (water, wastewater and solid waste) company with a regional focus in Latin America to gain the size and visibility of an international player in a market dominated by a few large firms, by providing a financial instrument with wide applicability in the water and sanitation sector, throughout emerging market countries.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Javier Vilaplana, Deputy General Manager
Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla S.A. E. S.P.
Fax: 57-5- 368-4874
Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla S.A. E. S.P.
Fax: 57-5- 368-4874