|Carlos Fradique-Méndez||María Natalia Rodríguez|
Colombia's fourth generation infrastructure programme unveiled by the government back in 2013 and further developed in 2015, for the first time formally acknowledged and subtly introduced basic premises of project finance into the legal framework. The ambitious investment targeted intermodal transportation development. Since its structuring stage, it has entailed several alterations both to the applicable regulation and institutional behaviour. The official introduction of this specialised type of financing scheme through the PPP law (1508 of 2012) and infrastructure law (1682 of 2013) has proved its worth by attracting investors with a sophisticated appetite and achieving the closing of the majority of financing agreements.
However, the road to disbursement has thrown up a series of unexpected obstacles in the so-called solid framework. These challenges have exposed numerous practical issues. Among other things, the difficulties have derived from the interaction of the multiple actors, such as land management and acquisition; extensions or amendments to the scope of the concession agreements; the duration and efficiency of the processes carried out with the National Infrastructure Agency; the limited funds of the financial institutions; the assembly of the security packages; and, certainty regarding dates of payment of the concessionaire's distribution. Moreover, the spread of corruption scandals has largely discouraged key investment in Colombia and negatively affected the completion of financings that were already in progress.
Consequently, participants have raised questions as to whether the prevailing regulations are sufficient, and whether it might be necessary to urge for further modifications. The ministry of finance, through its unit of financial regulation, has published the first institutional study of project finance prudential regulation. By means of a comparative study, the analysis concludes that Colombia's legal framework would not obstruct infrastructure project finance. Perhaps the path to disbursement and the completion of the projects of the largest infrastructure programme in Latin America should be construed through a comprehensive tailor-made regulation. More importantly, perhaps what is needed is a self-contained regulation capable of providing certainty and stability, rather than simply adjusting the existing and faulty legal framework.
Carlos Fradique-Méndez and María Natalia Rodríguez
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