Clifford Chance

Clifford Chance advises on financing for Troncales 5G toll road projects in Colombia

Global law firm Clifford Chance advised Bancolombia S.A., Corporación Andina de Fomento, Financiera de Desarrollo Nacional S.A., Inter-American Investment Corporation, International Finance Corporation, J.P. Morgan Securities PLC, MUFG Bank, LTD., and Sumitomo Mitsui Banking Corporation in connection with the COP 4.3 billion (~US$1.12 billion) multicurrency financing of the Troncales del Magdalena 1 and 2 toll road projects in Colombia (Troncales 1 and Troncales 2, respectively). Each project is being developed by a special purpose vehicle jointly owned by Ortiz Construcciones y Proyectos S.A. and KMA Construcciones S.A.S. and are part of Colombia's recently launched 5G highway infrastructure program. This is the first dual-toll road financing in Colombia involving three multilateral organizations.

The projects serve as a link between the country's center and the Caribbean coast, and will lead to significant improvements in mobility and travel time. Troncales 1 spans 260 kilometers, linking Puerto Salgar in Cundinamarca to Barrancabermeja in Santander, while Troncales 2 covers a 272-kilometer corridor from Sabana de Torres in Santander to Curumaní in Cesar.

The financing package includes credit facilities denominated in Colombian pesos and two separate COP-linked facilities.

Partner Fabricio Longhin commented, "We are proud to bring our extensive experience with Colombia's 4G program into the new wave of 5G financings. The synthetic COP loan we structured here, building upon our experience with the bridge synthetic financing for the Bogotá-Girardot project, was highly complex and innovative and gave rise to a number of intercreditor questions for which there were not established solutions. As a result of the 5G program's move towards projects with revenues denominated exclusively in local currency, synthetic COP structures will become prevalent for these assets, and what we structured for Troncales is likely to be regarded as the market standard. Also, it was a welcome development to see IFC, IDB Invest and CAF joining forces in a project financing after so many years."

Working with Longhin were associates Julián Hurtado Vallejo, Mariana Gutiérrez Ruiz and Fernando Liu, and foreign law clerk Juan Andrés Bosch Muñoz, with additional support from:

• White Collar: partner Megan Gordon and counsel Catherine Ennis and Jacqueline Landells 
• Tax: partner Avrohom Gelber and associate Wei Bin Tan
• Counsel to Administrative Agent and Intercreditor Agent: partner Daniel Winick and associate Xiaowen Zou advised Glas USA LLC and Glas Americas LLC.

Clifford Chance had advised, and is advising, on many infrastructure financing transactions in Colombia, including on the Buga-Buenaventura 5G, the Bogotá-Girardot, the Pamplona-Cúcuta, the Rumichaca-Pasto, the Conexión Norte and the Ruta al Sur toll road projects. The firm also advised on the financing for expansion of Port of Aguadulce in Buenaventura, on a complex debt refinancing for a strategic port in Cartagena, on the financing of the US$672.4 million Antioquia Port project and on the financing for the first line of the Bogota metro.