WASHINGTON DC, March 2, 2022 — MIGA has issued a guarantee on a COP 1 trillion (approx. US$254 million) loan being given to the Capital District of Bogotá for up to seven years. The loan, issued by Banco Bilbao Vizcaya Argentaria, S.A of Spain (BBVA), will finance improvements to Bogotá’s COVID-19 emergency response capacity and related healthcare infrastructure and services.
The COVID-19 pandemic has adversely affected Colombia and its capital Bogotá. The country has reported over 6 million confirmed COVID-19 cases and 138 thousand deaths as of late-February 2022. Bogotá, a densely populated urban metropolis of more than 8 million people, has experienced major outbreaks and has had a greater incidence of COVID-19 than the country at large. Colombia’s economy has also been affected, with GDP falling an estimated 6.8 percent in 2020 before rebounding to pre-crisis levels in 2021.
“As the world prepares to adapt to an endemic COVID-19, continuing to strengthen healthcare capacity to respond to the ongoing public health challenge is essential,” MIGA Executive Vice President Hiroshi Matano said. “Our guarantee is enabling the city of Bogotá to fund emergency responses and improve healthcare sector resilience by securing international financing, while helping diversify the city’s funding sources.”
This is MIGA’s first guarantee on a local currency loan being issued to a sub-sovereign government entity.
Colombia has a publicly funded and highly decentralized healthcare system that offers comprehensive health insurance to nearly 98 percent of the population. The COVID-19 pandemic has exposed vulnerabilities in the health systems, ranging from outdated infrastructure and lack of intensive care unit (ICU) beds to shortages of laboratories and reagents to analyze COVID-19 tests. In Bogotá, COVID-19 surges have placed significant stress on the healthcare system, with ICU occupancy rates at times approaching 100 percent.
The MIGA-guaranteed loan will support Bogotá’s response to the COVID-19 pandemic by funding COVID-19 testing efforts and the purchase of ambulances, personal protection equipment, and other materials to support COVID-19 mitigation efforts. The loan will also support increasing the quality of Bogotá’s healthcare services through the expansion and upgrading of existing health infrastructure, provision of equipment for primary care and specialized clinics, and strengthening of Bogotá’s Medical Emergency Information System.
“It is a milestone and a source of pride for Bogota to be the first sub-sovereign entity worldwide to obtain financing for COVID support backed by a MIGA guarantee, as well as to be granted the first ever MIGA guarantee in Colombian pesos. This demonstrates the financial and institutional soundness of the city and opens the doors to other cities around the world to venture into innovative and efficient financing alternatives in the international market. With this financing we strengthen the District Health System, improving the well-being of the inhabitants of Bogota D.C,” Bogotá’s Director of Public Credit José Roberto Acosta Ramos said.
BBVA, an existing MIGA client, is Spain’s second largest financial group and domestic bank. MIGA has provided non-honoring guarantees to BBVA on two other COVID-19 response projects in Colombia and Panama. BBVA has a large international presence in both developed and emerging markets, including strong franchises across Latin America.
“We are very pleased to partner with Distrito de Bogota in its efforts to fund emergency responses and improve healthcare sector resilience. This financing is aligned with BBVA’s strategic priority to accompany our clients in their transition towards a more sustainable future. BBVA's commitment to its public sector clients is stronger than ever. We look forward to cooperating with MIGA in pioneering innovative financing solutions to support Latin América,” BBVA’s Head of Global Client Coverage José Ramón Vizmanos said.
The project is aligned with the World Bank Group Fast Track COVID-19 Facility, which assists member countries in addressing this global pandemic and its impacts. It also aligns with MIGA’s COVID-19 response package, which entails using non-honoring guarantees to help raise financing to procure medical goods, services, equipment and infrastructure, and upgrade medical systems.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over US$65 billion in guarantees across 120 developing countries.
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