Bogota, the capital and main economic center of Colombia, has a population of 7.3 million and contributes about a quarter of the country’s GDP. GDP per capita, estimated at $4,300 in 2006, is well above the country’s average of $3,255. The economy is diversified and no single sector is dominant. Bogota is divided into 20 local wards, which focus on neighborhood-level infrastructure and community consultation. City-wide services, including the core street network, are administered by Bogota Distrito Capital, which also collects local taxes. BDC is governed by a legislative District Council, with an elected Mayor leading the executive branch. BDC has steadily improved its performance since it emerged from a financial and service delivery crisis in the early 90s. The local issuer rating assigned by Duff and Phelps de Colombia is AAA, while the international foreign currency issuer ratings assigned by Fitch, S&P and Moody’s are the same as Colombia’s sovereign (BB+ / BB+ / Ba1, respectively).

The proposed IFC investment is an A loan of $50 million to help finance the 2007-2008 capital expenditures program for periodic maintenance and rehabilitation which is expected to cost approximately $160 million.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

Bogota, in the department of Cundinamarca, Colombia

Improved infrastructure: Investments to be financed under the proposed project will contribute to economic growth and the competitiveness of the city’s businesses by improving the local infrastructure. The street rehabilitation investments will reduce vehicle operating costs; times spent in congestion and accidents, and extend the life of the city’s infrastructure. Given the high traffic density, earlier road rehabilitation programs financed by IBRD in Bogota achieved ERR above 30%. Improved cash and debt management: The proposed loan would better match the disbursement profile of the city’s capital expenditure program, while still providing terms and tenors appropriate for investment in infrastructure assets with long useful life. It will help improve the Bogota’s debt profile and reduce the risks associated with shorter-term borrowing alternatives.

The IFC loan will help the city complement its capital market borrowings and optimize its overall debt profile by matching the timing of disbursement of funds with the cash needs of a complex investment program involving multiple rounds of procurement, while also obtaining tenors sufficient to match the useful life of the infrastructure assets.

The project is a category B investment according to IFC’s Environmental and Social Review Procedure. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) disclosed through IFC’s external website.