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Bogota COVID-19 Pillar 1

$381 million
Financial Services
Summary of Proposed Guarantee

Project Description:

This summary covers a Loan Facility from Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) to Bogotá Distrito Capital (Bogota) to help the capital city of Colombia finance its COVID-19 emergency response capacity and further strengthen and upgrade the medical system post-COVID-19 (the Project). MIGA is considering issuing a guarantee covering a loan for up to COP 1,000 billion (approx. US$272 million) from BBVA to the government of Bogota. MIGA’s guarantee would be for up to an estimated COP 1,400 billion (approx. US$381 million) for a period of up to 7 years (excluding availability period) against the risk of Non-Honoring of a Financial Obligation by a Sub-Sovereign entity. This would be MIGA’s first non-honoring guarantee denominated in Colombian pesos.

Since the first case was confirmed on March 6, 2020, Colombia has been hit hard by the COVID-19 pandemic, with Bogota as the most affected city in the country. Despite the containment measures that have been implemented, the virus continued to spread precipitously, straining the capacity of Bogota’s healthcare system as well as the District’s health budget. The proposed MIGA-guaranteed loan would help finance investments and procurement implemented by Bogota’s Secretariat of Health to respond to the COVID-19 pandemic and to strengthen the quality of healthcare services in Bogota. These investments include improvements or expansions for up to 39 public hospitals or clinics, the purchase of COVID-19 test kits and laboratory equipment, the purchase of new ambulances, and the upgrading of Bogota’s Medical Emergency System (Line 1-2-3). The loan could also be used to reimburse eligible public healthcare expenses related to the pandemic that have already been incurred.

Environmental Categorization: The Project is a category B under MIGA’s Policy on Environmental and Social Sustainability. Click here  for the project’s Environmental and Social Review Summary.

Development Impact:

The COVID-19 pandemic has had a severe impact on Colombia, which had the 12th highest total of COVID-19 cases and the 11th highest total of COVID-19 deaths in the world as of April 28, 2021. The capital city of Bogota has been particularly affected by the disease, necessitating emergency response measures and highlighting the need to strengthen the city’s health infrastructure.

The Project has dual objectives: (i) to improve Bogota’s COVID-19 emergency response capacity and (ii) to strengthen the quality of the health care services in the city. In support of the first objective, the Project will help finance the acquisition of laboratory equipment and COVID-19 tests, as well the acquisition of ambulances amongst other initiatives. In support of the second objective, the Project will finance upgrading and expanding existing healthcare infrastructure as well as the Bogota’s Medical Emergency System.

The Project is aligned with the WBG Fast Track COVID-19 Facility to assist member countries in addressing the current global pandemic and its impact. The Project is also aligned with the World Bank COVID-19 Crisis Response Development Policy Financing, approved in June 2020, under its objective of supporting the capacity of the health system in the country. This Project is part of MIGA’s response package for the COVID-19 crisis, falling under Pillar One, whereby MIGA would utilize its non-honoring coverage to support governments raising financing to: (a) support the procurement of urgent COVID-19 medical supplies and services and (b) further strengthen and upgrade the medical system post-COVID-19.