Colombia’s opportunities for investments in infrastructure

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June 16, 2022
After the economic turmoil suffered by the Covid-19 pandemic, Colombia is already passing from reactivation to growth. The country not only has recovered from most of the damages caused by the pandemic, but it’s also already thinking towards the challenges that the world is currently facing. This is being done in many areas that are critical to the country’s economy: exports are growing, tourism to the country is hitting high notes and investment opportunities are opening.

One of the sectors in which many investment opportunities can be found is infrastructure. This area is a special priority for the Colombian government because the country needs to keep transforming its infrastructure into the fifth generation (5G), and it goes without saying that a modern, capable, infrastructure is the foundation from which exports, tourism and the day-to-day lives of the Colombian people begin to build up.

That’s why in this era of transition from reactivation to growth, Colombia offers many opportunities for investments in infrastructure. Foreign investments play a key part in these projects, in fact, for transportation infrastructure, they represented 11.8% of total FDI (Foreign Direct Investment) between 2016 and 2020.

The Colombian government’s legal framework also encourages investments in infrastructure and is designed to keep close ties between the public and the private sector. Basically, the mechanism through which investment projects are realized is the Public-Private-Partnerships (PPP), established in 2012; Colombia was recognized by the World Bank ranking in 2020 for being the second place in the world in development of infrastructure projects through the PPP scheme. In addition, Decree 438 of 2021 promoted private investments to go into infrastructure projects, strengthening the PPP system and encouraging foreign investments.

Transportation infrastructure

Transportation is an area of the national infrastructure that is heavily supported by the Colombian Government. 79 projects in this sector are being supported, with 40 of them already granted during the administration of President Iván Duque, and that required investments for more than USD $20 billion, and 39 more to be structured during 2022. Up until 2035, investment opportunities in transportation infrastructure projects are worth USD $71,1 billion; these include opportunities in road infrastructure (USD $60 billion), airport expansion projects (USD $5,7 billion), railway infrastructure rehab (USD $3,4 billion), riverine infrastructure (USD $1,6 billion) and port infrastructure (USD $433 million).

Moreover, the National Infrastructure Agency (ANI, in Spanish), already has 14 initiatives ready for the first wave of 5G projects, that includes the areas of road network, railway, airport and fluvial infrastructure. Investments in these projects will reach an estimated value of USD $5,6 billion and create approximately 635,000 jobs. The second wave of 5G projects, currently, comprehends 12 investment initiatives, estimated to be worth around USD $7,7 billion in road, airport and fluvial infrastructure.

One of the most ambitious infrastructure projects is the intervention of the fluvial pathway ‘Canal del Dique’, that connects the port of Cartagena, in the Great Colombian Caribbean region, with the municipality of Calamar, located at the inside of the country. Investments for this project are worth USD $882,5 million and its currently open for bidding until June 24th.         

Social and touristic infrastructure

Apart from transportation infrastructure, there are investment opportunities for the social and touristic infrastructure sectors. For one side, social infrastructure is essential to improve the quality of life of the Colombian people. To invest in projects like schools, hospitals and even prisons is very important to the country’s objective of overcoming poverty and ensuring the well-being of its citizens.

However, public funding isn’t enough to accomplish the initiatives for social infrastructure, and that’s when PPP schemes acquire even more relevance. There are currently investment opportunities worth USD $1.2 billion in social infrastructure projects like hospitals, schools, cultural centers, and prisons.

On the other hand, the tourism sector also has a high demand for infrastructure projects, since it’s the sector in which Colombia is having a big comeback after the pandemic, investment opportunities are available for upgrading the touristic offer.

Most of the opportunities for investments in the tourist sector can be found in the development of all-inclusive resorts and luxury hotels in the Great Colombian Caribbean region; glamping; wellness; birdwatching and wildlife sighting facilities; hotels in rural areas; family, water, and adventure parks.

 

To learn more about investment opportunities in infrastructure in Colombia, click here.

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