Credicorp Capital has entered a strategic alliance with Grupo Sura to create a fund to finance highways and other infrastructure projects in both Peru and Colombia.
Peru’s largest financial institution signed an agreement this week to create the 4G Private Capital Fund along with Sura Asset Management to finance the construction of highways in Colombia. The fund will also receive contributions from insurance companies and pension funds in both countries as well as Colombia’s state development bank and the World Bank’s International Finance Corporation (IFC).
“This investment will be crucial to mobilize financing for infrastructure and develop capital markets in Colombia,” Carlos Pinto, the IFC manager the Andean region, told El Comercio.
“It is key to have very strong teams for investment decisions, combining the talent and experience of Credicorp Capital and Sura Asset Management, whose specialists are located in the region’s main countries,” Credicorp CEO Christian Laub told Gestion.
Each of the “multilatinas” made an initial contribution of $48 million to the fund which will be controlled with an equal stake by both Credicorp and Grupo Sura. Colombia finance minister Mauricio Cardenas told EFE that his government was preparing the allocation of $296 million to the FDN state bank in order to contribute to individually approved projects. The fund currently has $400 million in investment capital.
In 2013, President Juan Manuel Santos announced the “highways for prosperity” plan to spend $24 billion on building and improving highways in the country which has some of the most difficult geography in the world. The 4G Private Capital Fund will look to finance 4,350 miles of roads worth $16 billion.
Spokesmen for Credicorp and Sura have indicated that they are designing a similar fund to finance infrastructure projects in Peru, which looks to drive growth with public spending after the end of a historic commodity cycle.