Sacyr Concesiones has closed the refinancing of the 4G road project connecting Pamplona and Cucuta (Colombia) for $642 million.
This refinancing received a social qualification by Moody's ESG Solutions, and it includes a $400 million social bond, a $165 million multi-trench bank loan and another bank loan in Colombian pesos, equivalent to $77 million.
In addition to the senior loan, this operation builds liquidity for the project, which replaces the reserve accounts by letters of credit charged to the project, valued at $65 million.
This is the third social bond Sacyr issues in Colombia, and the largest to date in Latin America linked to an infrastructure project.
Over 5,000 direct jobs were created across different project stages, which contribute to the development of the region and local communities.
JP Morgan and Santander acted as the structurers of the operation. The following banking entities were involved in the financing: Santander, JP Morgan Chase Bank, N.A., Instituto de Crédito Oficial E.P.E., MUFG Bank, Ltd., N.A, MetLife, Allianz Capital Partners, IDB Invest, BlackRock, FDN, Banco Latinoamericano de Comercio Exterior, S.A.
The social bond had a successful placement. The bond issuance was rated Baa3 y BB+ by rating agencies Moody's and Fitch, respectively. The bond reaches maturity at 18 years, that is, in February 2041.
The labelling as social bond and loan comes after an assessment and analysis process by Moody's ESG Solutions, which ratifies the bond and loans are in alignment with the International Capital Market Association (ICMA)’s basic Social Bond Principles and the Loan Syndications and Trading Association (LSTA) ‘s Social Loan Principles 2021.
Aspects assessed, among others, include the positive impact that the project will cause on the local communities within the project’s influence area, through the proceeds obtained from the issuance.
The P3 company Unión Vial Río Pamplonita, 100% Sacyr Concesiones, is in charge of the definitive studies and designs, financing, environmental, property and social management, construction, improvement, rehabilitation works and operation and management and element transfer of Pamplona-Cucuta road project, in Norte de Santander:
• Project extension: 62.2 km (to and from).
• Newly constructed road: 50.2 km (single and divided highway).
• Rehabilitation: 72.2 km of existing road (between Pamplona and Betania, Los Patios).
Pamplona-Cucuta will improve road connectivity in Colombia, especially in the border to Venezuela, promoting the social and economic development of the northeastern region of Colombia.
Thus, the road will reduce travel times and transport costs, directly impacting over 782,000 people locally.
Several social and environmental program-related actions have been launched, including training sessions, tree planting, supporting entrepreneurial projects, health brigades and others