Ecuador-Colombia toll road project gets hybrid financing

Posse Herrera Ruiz in Bogotá has helped the concessionaire behind the Pasto-Rumichaca motorway and its sponsors obtain a bridge loan worth US$60 million through a mix of corporate and project financing.

The lenders relied on Uría Menéndez in Bogotá, Philippi Prietocarrizosa Ferrero DU & Uría (Colombia) and Pérez Bustamante & Ponce Abogados in Quito. Jones Day and Milbank, Tweed, Hadley & McCloy LLP are thought to have provided international counsel to the concessionaire and the banks respectively, but these could not be confirmed prior to publication.

Ecuadorean construction company Herdoíza Crespo, which is sponsoring the project and granted a corporate guarantee for the financing, relied on Noboa, Peña & Torres Abogados in Quito for the deal, which closed on 19 September.

The loan is comprised of both corporate and project finance. It will be used by the concessionaire Vial Unión del Sur to fund works carried out on the toll road between the north-western region of Pedregal and south-western Catambuco in Colombia over the next few months.

The loan is conditioned on the project complying with social and environmental standards set by the International Finance Corporation and the World Bank Group, since part of the toll road will pass through the Colombian district of Nariño, where there are several indigenous communities.

The deal indicates strong investor appetite for Colombian infrastructure projects despite heightened scrutiny surrounding several projects during Colombia’s elections earlier this year. Conservative candidate Iván Duque won with a 54% majority, and has been welcomed by local lawyers.

The construction of the Pasto-Rumichaca project is expected to take three years to complete and will see the creation of 78 kilometres of dual carriageway alongside six viaducts. Five kilometres of existing road will also be improved as part of the project.

The toll road is part of Colombia’s 4G infrastructure programme, which aims to improve the country’s road network and includes some 50 projects and more than 10,000 kilometres of roadway and motorway.

Last month, the same concessionaire obtained a US$50 million loan for one of its projects in north Colombia. Posse Herrera Ruiz, Uría Menéndez and PPU also advised on that deal.

Jones Day is also thought to have advised in another loan agreement for a different 4G infrastructure project earlier this year.

Counsel to Concesionaria Vial Unión del Sur, Sacyr Concesiones Colombia, Sacyr Concesiones Participadas, and Herdoíza Crespo Construcciones Colombia

In-house counsel to Concesionaria Vial Unión del Sur – Héctor Méndez

In-house counsel to Sacyr Concesiones Colombia – Rafael Low, Francisco Martínez León, Mercedes Rubio and Joaquín Pérez Marsa

In-house counsel to Herdoíza Crespo – Gabriel Solís

Posse Herrera Ruiz

Partners Mariana Posse and Alessia Abello, and associates Sebastián Lora, María Camila Pérez and Carlos Guzmán in Bogotá

Counsel to JP Morgan and Santander

Uría Menéndez

Partner Javier Valle and associate Beatriz Albors in Bogotá

Philippi Prietocarrizosa Ferrero DU & Uría (Colombia)

Partners Jorge Di Terlizzi and Juan Fernando Gaviria, and associates Carolina Duque, Carlos Padilla, María Margarita Lorduy, María Camila Quintero, María Camila Aponte, Ana María Ramírez, Beatriz Albors and Cristina Pérez in Bogotá

Pérez Bustamante & Ponce Abogados

Partner Bruno Pineda and associate Natalia Almeida in Quito

Counsel to Herdoíza Crespo Construcciones

Noboa, Peña & Torres Abogados

Partner Patricio Peña in Quito


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