The proposed investment is a Sustainability Linked Credit Risk Sharing Facility for up to US$ 50 million in COP$ equivalent to a commercial bank to provide a Sustainability Linked Loan of up to US$ 67 million in COP$ equivalent to the District of Barranquilla (BAQ) for a 10-year tenor with a 2-year grace. This refinancing will be the first Sustainable Linked Loan in the subnational market in the region and the first time IFC deploys Sustainability Linked Finance through an RSF structure. It will improve the District’s financials and debt profile, having an indirect development impact by optimizing its cash flows, reducing vulnerability to refinancing, and freeing up resources for investments in sustainable urban infrastructure and social programs.
BAQ will use the SLL funds to refinance existing debt that was used to finance the construction of the subprojects below, all of which are operational:
Neighborhood Local Street Infrastructure (Barrios a la Obra): Between 2008 and 2023, this sub-project aimed at paving/restoring approximately 353 km of existing access roads, streets, and sidewalks in low-income neighborhoods of Barranquilla. which has had a significant impact on the communities in terms of inclusion and connectivity as well as adaptation to climate change with paved roads that are less vulnerable to damage due to flooding. BAQ’s Urban Development Company (EDUBAR) is responsible for the management and implementation of this program.
Public Parks Renovations (Todos al Parque): Since 2011, this sub-project has entailed the renovation of 202 parks and the construction of 48 public parks, mostly in low-income areas. The new developments are related to joint work between the private real estate developers in Barranquilla and the District, using areas provided by the private party around the real estate project location. As a result, 93% of households in 188 neighborhoods have a green public space within an 8-minute walk distance. BAQ’s District Infrastructure Agency (ADI) is responsible for managing Todos al Parque.
The Magdalena River Waterfront (Gran Malecon) functional units 1 & 2: Gran Malecon is a linear public space of five kilometers designed to rebuild the connection between Barranquilla and the Magdalena River. The Gran Malecon was developed in an area that was abandoned and unused and that has become one of the main centers of attraction in the city. It was designed in four functional units, intervening 429 hectares of public space. The Gran Malecon was opened to the public in 2017. IFC Project only involves Functional Units 1 and 2.
As stated by the IFC, the investment is a Sustainability Linked Credit Risk Sharing Facility for up to US$ 50 million in COP$ equivalent to a commercial bank to provide a Sustainability Linked Loan to District of Barranquilla. The proceeds from the Sustainability Linked Loan of up to US$ 67 million in COP$ equivalent will be used to refinance existing debt that was originally used to finance the following
A financial intermediary will be involved by the IFC to provide a loan to the District of Barranquilla. However, at the time of disclosure, the IFC did not provide the name of the intermediary institution.
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