On January 12, 2015, MIGA issued a guarantee of $95 million covering a non-shareholder loan by KfW Bankengruppe (KfW) of Germany to Financiera del Desarollo S.A. (Findeter) in Colombia. The coverage is for a period of up to 10 years against the risk of non-honoring of financial obligations by a state-owned enterprise.
This project involves an expansion of lending by Findeter to sustainable urban development projects. This includes urban mobility, health and education infrastructure, housing services, and housing-related electricity and water supply in a number of cities across Colombia. The project is funded by a $100 million non-shareholder loan from KfW. Findeter will fund the projects through financial intermediaries, primarily banks, to municipalities/cities; public and private companies; and to micro, small, and medium-size businesses. At a broader level this financing would be a part of the global “Sustainable and Competitive Cities Program,” which promotes investment in strategic projects aimed at transforming cities around the world into sustainable, prosperous, and competitive environments resulting in improved quality of life. It is expected that Findeter would use the KfW funds to finance approximately 20-30 subprojects.
The project is expected to have substantial development impact in a number of sectors. The type of sustainable infrastructure projects that will be financed include: urban transport projects that improve the logistics and competitiveness of businesses, reduce carbon footprints, and improve road safety; social housing development programs in rural and urban areas that provide more affordable living solutions and improved water and sanitation facilities; health infrastructure such as the construction of clinics and other facilities; and educational facilities.
At a broader level, Findeter establishes its priorities based on the National Development Plan set by the government. The World Bank Group’s Country Partnership Strategy (CPS) aims to support selectively the new National Development Plan. Specifically, the CPS indicates that the World Bank Group will carry out activities for which the government or the private sector have expressed explicit need either through financial, knowledge, or convening services. These activities are combined as a results-focused package of support grouped under three strategic themes expanding opportunities for social prosperity; sustainable growth with enhanced climate change resilience; and inclusive growth with enhanced productivity.