Bogotá, the capital and largest city of Colombia, was the first place in the country to experience major outbreaks of COVID-19. Government officials in the capital district quickly realized the magnitude of the financial impact heading their way. They projected a potential $1.5 billion loss in revenue over the next four years while facing an immediate demand on the capital district’s financial resources for a health emergency of unknown duration. There was a pressing need for access to financing to deal with the crisis. The challenge was how to obtain this quickly with terms that worked for the capital government and enabled authorities to help residents stay healthy.
We recently went to Bogotá, braving traffic jams in the city of 8 million people, to gauge the impact of MIGA’s response to this challenge.
An Innovative Solution to a Pressing Financial Need
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), an existing MIGA client, is Spain’s second-largest financial group and domestic bank. It structured a first-of-its-kind financing package supported by MIGA guarantees to address Bogota’s needs. The bank proposed a financing package in Colombian pesos (COP) at an attractive fixed interest rate for a seven-year period. MIGA issued its first guarantee on a local currency loan of COP 1 trillion (approx. $254 million). In another first, MIGA’s guarantee covered a loan to a sub-sovereign government entity, the capital district. The loan funded a variety of health care projects designed to address the ongoing COVID-19 emergency and strengthen health care infrastructure and services for the long haul.
“Having MIGA guarantee our loan proved extremely beneficial to the capital district. We were able to obtain a loan in local currency, helping us to avoid exchange rate volatility. The opportunity to borrow at a fixed and very favorable interest rate over a relatively short term also resulted in reduced financing costs,” said John Sarmiento, Director of Public Credit of the Bogotá capital district, during our meeting at his office.
Meeting Residents Where They Gather
While the population in Colombia benefits from a mostly publicly funded and highly decentralized health care system, quality of care and financial sustainability represent ongoing challenges. The COVID-19 pandemic exposed several weaknesses, ranging from outdated infrastructure and lack of intensive care unit beds to shortages of laboratories and reagents to analyze COVID-19 tests. The capital district had to find a way to protect its residents from the virus despite these shortcomings.
Alejandro Gomez Lopez, Secretary of the Bogotá capital district, explained that authorities undertook an aggressive education and vaccination campaign to protect the population, promoting continued vigilance and best practices to limit the spread of the virus. In addition to offering the vaccine in more than 200 established vaccination centers, health authorities deployed mobile units in stadiums, libraries, and public parks.
Current vaccination levels suggest that the vaccination campaign was largely successful. Gomez cites statistics indicating that the combined vaccination rate for the first two vaccines is almost 99 percent for those 18 years and older. About 77 percent of children ages three to 11 have received the first dose, and 55 percent the second dose. Vaccination rates for the boosters are lower given the COVID-19 fatigue that has taken hold of the population.
Gomez points out that the district was dealing with as many as 100,000 active patients at the peak of the pandemic, a level now reduced to 2,000. Likewise, ICU occupancy rates hovered around 90 percent at the peak, but are currently down to less than 80 percent.
Long-term Improvements to Health Services and Infrastructure
Bogota’s emergency call number, known as “Linea 123”, provides access to all the security and emergency services available to the capital district residents.
As the COVID-19 pandemic evolved, the health department realized that a massive expansion of Linea 123 was required to address the growing need for services. The number of operators to answer calls 24/7 grew from 100 to 400. A group of 155 medical teams made home visits around the capital district to visit every resident calling with COVID-19 symptoms. Gomez credits this effort with “helping to limit the spread of the virus, preventing deaths, and making it possible to keep hospitals from reaching a breaking point during the peak of the pandemic.”
Another important improvement to health care services is the addition of a fleet of 105 new ambulances. The existing fleet was a decade old and in need of replacement. The need to reach vulnerable residents in hard-to-reach areas led to the purchase of a number of new ambulances that are mechanically equipped to travel through difficult terrain.
Permanent improvements to health care facilities, including hospitals, clinics, laboratories were also an integral part of the overall plan to strengthen the existing infrastructure serving Bogota’s population. The impact of COVID-19 on the global economy affected the speed to completion and increased costs for renovation projects. Worldwide problems in the supply chain, particularly the limited availability of shipping containers, led to shortages of building materials to renovate medical facilities and delayed the delivery of medical equipment for hospitals and laboratories. Even personal protective equipment for health care workers was difficult to source at times.
Despite the challenges, Bogotá was able to finish many of the infrastructure projects across the capital district in 2022 and expects all renovation projects to be completed this year.
“Obtaining the financing facilitated by the MIGA guarantee was most welcome news for the health department. We knew that much-needed resources to deal with the COVID-19 pandemic would become available quickly,” Gomez said. “Just as important, the opportunity to renovate existing hospitals, laboratories, and other health facilities meant that we could improve the quality of services offered to the residents of the capital district for many years into the future.”