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Medellín Metro News 98

Published in Medellín Metro News Written by December 15 2017 0

Colombia’s national infrastructure agency (Agencia Nacional de Infraestructura, ANI) and the Financiera de Desarrollo Nacional (FDN) national financing organization jointly announced December 14 that a new deal ensures COP$1.47 trillion (US$490 million) financing for the “Ruta al Mar” highway project linking northern Antioquia to Atlantic coastal ports.

The new financing package is a first-of-its-kind for Colombian public-private infrastructure projects, involving a combination of bonds and other investors and featuring investment-grade rankings from Wall Street bond raters Fitch and Moody’s, according to ANI.

Medellin-based Construcciones El Cóndor is the highway project developer and builder.

Commenting on the deal, FDN director Clemente del Valle stated that the financing consortium includes local banks, the FDN, debt-finance specialist Ashmore CAF, and international financiers.

FDN will provide COP$400 billion (US$133 million) or 27.17% of the total loan funds, while local banks will put-up 19.02%. Ashmore CAF assumes 18.74% and another 35.46% comes from international capital markets via purchase of Colombia’s UVR bonds.

For the deal, U.S.-based Goldman Sachs organized a COP$520 billion (US$173 million) float of bonds carrying a 26-year term and a 6.75% coupon, according to ANI.

The “Ruta al Mar” Project – linking Antioquia, Cordoba, Sucre and Bolivar departments -- is part of a series of “fourth generation” (4G) highway projects around Colombia. The latest project also would smooth commerce between Valle del Cauca, the coffee regions and Atlantic ports.

The project will create bypasses around congested municipalities along the route, as well as connect to other major highways including the “Conexion Norte” and “Mar 2” highways, according to ANI.

In all, “Ruta al Mar” includes construction of 112 kilometers of new highway, rehabilitation and upgrades to another 226 kilometers of existing highway, and operations-and-maintenance of another 154 kilometers of existing highway, according to the agency.

FDN’s investors including Japan-based Sumitomo Mitsui, the U.S.-based International Finance Corporation (a division of the World Bank), and Latin America’s “CAF” multilateral investment bank.

Construcciones El Condor president Luz María Correa hailed the new financing deal, describing it as “a great milestone in financing of public-private [infrastructure] partnerships without government funds -- and this validates the strength of 4G concession contracts.”

Published in Medellín Metro News Written by December 13 2017 0

Antioquia’s development agency (Instituto para el Desarrollo de Antioquia, IDEA) announced December 13 that it’s extending a COP$132.5 billion (US$44 million) credit for the 157-kilometers-long “Vias del Nus” fourth-generation (4G) highway project in northern Antioquia.

The credit will help support financing, design, environmental studies, purchase of adjacent properties, construction, rehabilitation and operations along the new route, which will pass through the municipalities of Donmatías, Cisneros, San Roque and Maceo.

The new route will connect Medellin and central Antioquia northward to other major highways including “Magdalena 2” and the Northeast Trunk routes, as well as smoothing connections to southern Colombia, according to IDEA.

Project director Ricardo López Lombana added that “this is the first time that an institution such as IDEA – which isn’t a comercial bank – has entered into competition with national and international banks . . . marking an important moment for financing [infrastructure] projects in our country.”

The project – estimated to cost COP$1.5 trillion (US$498 million) and due for completion in 2021-- also includes construction of two, 4.1-kilometers-long parallel tunnels through the “Quiebra” mountain pass.

That pass is the principal obstacle linking Medellin to northeast Colombia. The existing “Quiebra” tunnel – far too small for highway vehicles -- was built for narrow-gauge railroads that no longer operate commercially.

The first phase of construction involves rehabilitation of 35.6 kilometers of highway between Cisneros and Alto Dolores. Then -- over the next four years -- 24.3 kilometers of four-lane, divided highway between Pradera and Porcesito will be built.

By 2021, the project will form part of 97.5 kilometers of four-lane divided highway including the section between the Medellin suburbs of Bello and Hatillo, according to Colombia’s national infrastructure agency (see Medellin Herald on March 09, 2017).

The “Vías del Nus” concessionaires include Mincivil S.A. (51.85%), Construcciones El Cóndor S.A. (22.22%), SP Explanaciones S.A.S. (21.10%), EDL S.A.S. (3.72%) and Latinoamericana de Construcciones S.A. (1.11%), according to IDEA.

Published in Medellín Metro News Written by December 06 2017 0

Colombia’s national planning agency -- Departamento Nacional de Planeacion (DNP) -- on December 5 announced that the city of Medellin ranks best among Colombia’s 13 biggest cities for government planning and execution.

While Medellín took the top spot in the ranking of Colombia’s biggest cities, Bogotá came in second, followed by Barranquilla, Cali, Pereira, Manizales, Pasto, Ibague, Cartagena, Bucaramanga, Villavicencio, Monteria and Cucuta (see chart, above).

Three of the top-five mid-sized cities in the DNP study also are in Antioquia: Rionegro, Envigado and La Estrella, along with Girardot and Mosquera (the latter two both in Cundinamarca).

“The report highlights those municipalities that, starting from similar initial capacities, achieve good management and better development results -- that is, increasing the quality of life of the population is the ultimate goal of public management at the local level,” according to DNP.

“After 10 years of measuring ‘Integral Performance,’ the DNP has updated this indicator and launches the ‘New Municipal Performance’ measurement, an index that evaluates the new challenges of local administrations and for the first time measures results-oriented management.”

“This new measurement seeks to be a useful instrument for the design of policies aimed at strengthening the capacities of territorial entities, in such a way that results-oriented investment is encouraged and we achieve the closing of gaps at the territorial level,” added DNP acting director Juan Felipe Quintero Villa.

The ranking system grouped “homogeneous” municipalities, “taking into account the existing differences in their capacity levels with the resources they have, as well as their level of rurality,” according to DNP.

The agency measured capacities of 1,101 municipalities, classified into six groups: Large cities (13 main cities); Group 1 (high level of capabilities); Group 2 (medium high); Group 3 (middle level); Group 4 (medium low) and Group 5 (low level).

“The measurement takes into account variables such as the effort of the municipalities to generate their own resources, quality in the execution of resources by different sources, conditions of open government and transparency, as well as the use of territorial ordering instruments in the collection,” according to DNP.

The study also analyzed city planning and management of education, health, access to public services, security and citizen coexistence.

Mobilization of resources and land management instruments “are the main management challenges of the municipalities,” according to the agency.

City managers could improve their rankings via updating of real-estate cadastre and land use planning, “as well as using other instruments such as surplus value, urban delineation and valorization,” said Quintero Villa.

“At the national level, only 4% of the municipalities of the country make use of three or four land management instruments to increase [property tax] collection, while almost 96% of the country uses two or less,” according to DNP.

Meanwhile, “big gaps are seen in education and public services. While on average the net [public education] coverage of the 13 main cities is 50%, the average coverage in the municipalities of ‘Group 5’ is 28%. Investments in educational infrastructure and teacher training are essential,” according to DNP.

For the biggest cities, the bigger challenge is “security and coexistence," DNP added.

Published in Medellín Metro News Written by December 03 2017 0

New York-based Institute for Robotic Process Automation and Artificial Intelligence (IRPA-AI) announced November 29 that Medellin’s “Ruta N” information-technology development center inked a deal whereby IRPA-AI will help launch a “Digital Americas Pipeline Initiative” (DAPI).

“The initiative will provide companies with direct access to trained, experienced, and certified robotics process automation [RPA] and artificial intelligence [AI] professionals on-demand and at-scale,” according to IRPA-AI.

The partners expect that the new deal will create “thousands of RPA and AI jobs in Medellín,” according to the Institute.

“DAPI will leverage IRPA-AI's membership network, trusted relationships, training and certification capabilities, as well as the cost-effective technology talent pool in Medellín to provide North and South American enterprises, service providers, startups and advisory firms with trained, experienced and certified RPA and AI professionals,” according to the Institute.

The deal will include IRPA-AI apprenticeships, training and certification programs, business networks “to promote market engagement and sales for new AI/machine learning, RPA, and digital powered services,” according to the Institute.

DAPI also aims to trigger more research and development in automation and AI “to enable analytics, Internet of Things [IoT] and cloud computing,” while generating more economic growth and jobs in Medellin.

“The greatest challenge in the rapidly expanding RPA and AI space is not technology, it’s talent, and proximity to that talent,” said Frank Casale, founder of IRPA-AI.

“This is the first initiative of its kind to address this challenge, while creating scalable and affordable talent from a trusted, time-zone-friendly source. DAPI has full support from the Colombian government, businesses and academic research communities,” he added.

“DAPI is a direct and bi-directional conduit, connecting RPA and AI technology, talent, intellectual property and funding between North and South America,” said Alejandro Franco, executive director of Ruta N.

“It provides us with economic fuel, creating highly sought-after employment opportunities that will positively and significantly impact our city's future business development. Frank Casale’s vision, and IRPA-AI’s expansive global network and technology expertise will help anchor Medellín as the RPA and AI hub of Latin America,” Franco added.

Companies around the world “have woken-up to the transformational effect that RPA and AI bring to their businesses [but] are hard-pressed to find the right digital talent from a relatively small pool,” according to the institute.

“A global study from IDT found that 80% of businesses cite digital transformation as a priority, but only 17% of respondents had enough employees with the right skills to embark on a smooth digital transformation.

“The serious shortage of experienced and qualified people who can meet the demand has U.S. and Canadian corporations looking outside traditional sources for geographically close and cost-effective talent,” the Institute added.

Published in Medellín Metro News Written by November 24 2017 0

A new study (see: https://idc.compite.com.co/) by the national private-sector competitiveness council (Consejo Privado de Competitividad, CPC) and Universidad del Rosario shows that Antioquia continues to rank near the top in competitiveness among all of Colombia's 32 departments (states).

The departmental competitiveness index (Indice Departamental de Competitividad, IDC) -- now in its fifth edition -- shows that Antioquia ranks second only to Bogota in over-all competitiveness, with Santander third, Caldas fourth, Risaralda fifth, Valle del Cauca sixth, Cundinamarca seventh, Atlantico eighth, Boyaca ninth and Bolivar in 10th place.

Antioquia’s population of 6.6 million represents 13.9% of gross national product (PIB in Spanish intials), equivalent to COP$119.9 trillion (US$40 billion), while per-capita PIB is COP$18.3 million (US$6,135) and output per worker is COP$40 million (US$13,410), the study shows.

Besides coming-in second over-all in the national competitiveness ranking, Antioquia came-in third on institutional quality, fourth in infrastructure, second in market size, third in health-care, third in efficiency, third in higher education, second in market efficiency, second in innovation/sophistication and second in empresarial dynamism, the study shows.

However, Antioquia came-in at a relatively poor 18th in basic (primary and secondary) public schooling – down sharply from the 2013 survey -- and only 19th in environmental sustainability, also down from 2013, the study shows.

The study analyzed 94 variables, grouped into three main categories: basic conditions, efficiency and innovation/sophistication. 

Among the variables analyzed, Antioquia came in at 15th place in unemployment rate (9.62%), second in terms of worker contributions to health and pension funds (at 46.7%), second in terms of secondary-school English proficiency (34.12%), 18th in percent of total area in protected parks (10.7%), eighth in terms of total area covered by forests (34.6%), and sixth in per-capita financial investment in basic public education.

Antioquia came in at 15th place in terms of freight costs (transfers from cities to ocean ports), at US$68.84 per tonne of freight. Antioquia’s decades-long backlog and delays in building divided highways through its mountainous terrain explain the relatively poor freight-cost competitiveness, compared to cities nearer the Atlantic and Pacific ports.

Notably, despite claims by certain politicians, Antioquia is among the best departments in all Colombia in terms of long-term contract electricity costs (mainly for industry), at COP$290 per kiloWatt-hour, the study shows.

In the report, Jaime Echeverri, vice-president of planning and development for the Medellin Chamber of Commerce for Antioquia, pointed to greater economic diversification and greater focus on value-added production in Antioquia over the past 10 years.

This diversification "has been supported by the cluster strategy, in which public-private cooperation and the commitment of companies have been important assets,” according to Echeverri.

“This strategy prioritized six clusters: electric power; business tourism, fairs and conventions; building; medicine and odontology services; technology, information and communications; and textile clothing, design and fashion.

“The cluster model has focused on generating environmental conditions that favor competitiveness and productivity, around aspects such as innovation, science and technology, education, institutionality, human resources, as well as strengthening of the business base for taking advantage of business opportunities in high-potential segments.

“In a recent context, and with emphasis on the subregions of the department, the model of productive chains is being developed, in which business initiatives around coffee, cocoa and dairy products have been prioritized, and progress is being made in citrus and rubber, among others.

“In terms of diversification of the export basket, and of export destination countries, the region now has the ‘Grupo Antioquia Exporta Más’ [Antioquia Exports More] initiative, which integrates the entities related to the internationalization of companies -- and this is supported by the Ministry of Commerce, Industry and Tourism.

“This initiative seeks to integrate efforts and resources, and generate synergies in face of the challenges faced by the export base of the region, by advancing in an orderly manner on different fronts: country cost, market opening and expansion, design and development of products and services , business strengthening, human talent, financing, promotion of export culture and development of strategic capabilities,” Echeverri concluded.

Published in Medellín Metro News Written by November 21 2017 0

Medellin Mayor Federico Gutiérrez announced November 20 that the city’s enormously popular “Metro” public-transport network will add yet another zero-emissions aerial-tram “Metrocable” system -- helping to stem air pollution mainly caused by obsolete diesel and gasoline vehicles.

The 2.8-kilometers-long, COP$298 billion (US$99 million) “El Picacho” aerial tram is due to start construction in 2018 and then start-up in late 2019 or 2020. France-based Poma -- which has built Medellin's other aerial tram systems -- won the competitive bidding for the project.

While most of the residents that must abandon nearly 400 homes to make way for construction of the new "Picacho" route have agreed to move, the city still hasn’t gotten 100% approvals, which could delay completion.

The “Picacho” line would serve about 160,000 people living in the working-class Northwest neighborhoods of Castilla and Doce de Octubre.

That line will join Metro’s existing electric-powered Metro rail system, an expanding electric-powered “Tranvia” road-tram network, the “Encicla” zero-emissions bicycle system, and the low-emissions, natural-gas-fueled “Metroplus” bus rapid transit (BRT) systems. The “Metroplus” BRT system also could be converted to zero-emissions electric power over the coming decade following initial tests underway on Metro’s first electric-powered bus.

Medellin gets virtually all its electric power from zero-emissions hydroelectric dams, with Medellin-based power utility EPM expanding capacity with the 2.4-gigawatt “Hidroituango” hydropower plant partially starting-up in late 2018.

Exito, EPM Expand EV Recharging

Meanwhile, Medellin-based multinational supermarket giant Exito announced November 21 that it’s opening the first two of a series of public electric vehicle (EV) recharging stations in Medellin – initially at the Éxito Poblado supermarket and at the “Viva” mall in the Laureles neighborhood.

While only a handful of EVs exist in Medellin to-date, local car manufacturer Renault (and its joint-venture partner Nissan) is one of the world’s leading makers of mass-market EVs -- mainly in Europe, so far. However, Renault has been boosting promotional sales of its “Twizy” mini-EV here in Medellin and could expand to more EV models in future.

“In the next few months, we will add two more [EV] charging stations at Éxito Envigado and Viva Palmas” in metro Medellin, added Claudia Echavarría Uribe, corporate affairs director at Grupo Éxito.

On the same day, EPM announced that it will have 20 EV recharging stations installed in metro Medellin by end-December 2017. That total includes the two new recharge stations involving Exito as well as a just-opened recharge station at the El Tesoro mall.

Additional EV recharge stations coming over the next month include Santafé mall, Unicentro mall, Los Molinos mall, Florida Parque Comercial, Mayorca mall (Sabaneta), Puerta del Norte (Bello); Viva Envigado, Plaza Mayor, Primer Parque de Laureles, Centro de Negocios Milla de Oro and Mall Río 10, according to EPM.

Published in Medellín Metro News Written by November 17 2017 0

Antioquia Governor Luis Perez announced November 15 the signing of a memo of understanding that would clear the way for starting construction in March 2018 of the US$600 million “Puerto Antioquia” ocean-freight port near Turbo.

Signing the memo were the Antioquia departmental government and its Instituto de Desarollo de Antioquia (IDEA) investment agency, France-based CMA Terminals, Colombia port operator/investor Pio SAS, banana export trade association Augura, the Sociedad Puerto Antioquia and the municipality of Turbo, Antioquia.

IDEA and the Antioquia department will put-up 5% of the funds for the project, due for start-up in second-half 2020, according to Governor Perez.

The new port not only would expand capacity for Colombia’s banana and coffee exports, but also will add new capacity for general containerized freight, bulk products and automobiles, at an estimated 6 million tonnes per year initial capacity.

At the signing ceremony, Colombia’s Transport Minister German Cardona Gutiérrez pointed-out that the national government’s COP$13 trillion (US$4.3 billion) current investment in “fourth generation” (4G) highways including the “Mar 1” and “Mar 2” highways and the “Toyo" tunnel -- linking Medellin to Atlantic ports (including the future Puerto Antioquia) -- are crucial to the economic future of Antioquia.

The deadline for financial close on the project is January 31, 2018, according to the governor.

Published in Medellín Metro News Written by November 09 2017 0

Medellin-based multinational utilities giant EPM announced November 9 that it has completed the buyout of 100% of the stock-and-assets of neighboring Rionegro’s “E.P. Rio” public utility, following which EPM aims to invest COP$550 billion (US$183 million) in water-and-sewage infrastructure in coming years.

Under the deal – finally approved by Rionegro’s municipal government on October 31 -- EPM would acquire an estimated 200,000 additional end-user clients, adding to its millions of clients in Colombia and elsewhere in Latin America.

Besides the municipality of Rionegro, E.P. Rio’s stockholders also included the departmental government of Antioquia, Catholic University of Oriente (Antioquia), Chamber of Commerce of Oriente Antioqueño, and the Corporación Empresarial del Oriente Antioqueño.

The fast-growing “oriente” (east of Medellin) region is now known as “Medellin’s second floor,” hosting the main international airport (Jose Maria Cordova, JMC) as well as growing industrialization along the Medellin-Bogota highway.

Commenting on the deal, Rionegro Mayor Andrés Julián Rendón Cardona added that “orderly development of our territory requires quality public services, which EPM has the capacity to offer, and with considerable future investments that our municipality doesn’t have the capacity to assume.

“From now through the end of 2019, EPM will be investing COP$315 billion [US$104 million], of which COP$225 billion [US$75 million] will go directly for capitalization of ‘E.P. Rio.’

“This will permit us to offer end-users of the water-supply system in the urban zone to enjoy quality water service, which is something we didn’t have. Besides, this consolidates a very important goal – that of cleaning-up the Rio Negro and its tributaries, so that we can convert our riverside to a place of meetings and recreation.”

EPM noted that according to projections by Colombia’s national planning agency (Departmento Nacional de Planeacion) the Medellin-Rionegro region by 2035 will become one of 10 of Colombia’s most important centers of economic development, requiring high-quality, robust utilities.

“This transaction will contribute to industrial, commercial and residential growth in Rionegro, through expanded and new infrastructure that will widen and improve public services, achieving the standards that already exist in the [Medellin] metro area and the Aburrá Valley,” according to EPM.

Between now and 2023, EPM will invest COP$140 billion (US$46 million) to complete a new aquaduct connecting the existing “La Fe” reservoir-lake in El Retiro to Rionegro, hence reducing Rionegro’s vulnerability to water shortages, according to EPM. The utility also will broaden coverage for sewer systems in the area.

Under the deal, EPM also will build a new sewage-treatment plant in Rionegro by 2021, aiming to slash contamination of Rio Negro, the river that eventually empties into the Guatape lake -- which feeds EPM's 560-megawatt hydroelectric plant near Guatape, Antioquia.

Published in Medellín Metro News Written by November 01 2017 0

The U.S. Agency for International Development (USAID) announced October 31 that it is helping Afro-Colombian and indigenous communities in El Bagre, Antioquia, to restore lands to safe and productive use following environmental destruction left by irresponsible miners.

In the COP$1.4 billion (US$470,000) USAID-sponsored project, 90 economically disadvantaged families – all members of the community councils of Puerto Claver and Los Mellizos, Antioquia – are planting Acacia mangium seedlings and native-tree seedlings in areas that had been wrecked by destructive mining.

The project aims to plant 327,745 trees -- 90% Acacia mangium and 10% native species -- according to USAID.

Each week, six groups of 30 people plant trees, providing “income opportunities to the greatest number of beneficiaries,” according to the agency.

In addition to planting, the families also support the tree-nursery operation and perform the hole-digging.

“The desert soils left by [irresponsible] mining in the village of Puerto Claver, municipality of El Bagre, Antioquia, will begin to grow again in the hands of families which for years lived on the little left by the informal exploiters,” according to USAID.

“These activities are part of the rehabilitation project of 295 hectares degraded by the informal mining in the corregimiento of Puerto Claver, which USAID supports through its ‘Oro Legal’ (legal gold) program, together with the mayor of the municipality of El Bagre and the Community Council of Puerto Claver (Afroclaver).

“Oro Legal will support the establishment of the plantations through the first maintenance [cycle], the fourth month of planting the seedlings, and the implementation of a beekeeping project, which will include the establishment of 200 hives.”

The “Afroclaver” community council, which ensures the protection of rights groups of the Afro-Colombian community, settled more than three decades ago in the township of Puerto Claver.

“This population did not have its own territory, until the mayor of El Bagre certified their possession,” according to USAID. Meanwhile, Colombia’s national land agency is working to finalize the community’s legal title to the lands.

To date, USAID’s “Oro Legal” program has supported soil-rehabilitation projects (in areas degraded by illegal mining) covering 1,989 hectares -- 1,141 in Bajo Cauca, Antioquia, and 848 hectares in the department of Chocó. The goal is to recover 11,500 hectares by 2020, according to the agency.

 

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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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