Colombia has drawn $5.4 billion from its flexible credit line with the International Monetary Fund, the body said on Thursday, which the country will use to help mitigate the impact of the coronavirus pandemic. “The authorities will use the drawing to help meet higher financing needs whilst maintaining strong external buffers in a context of heightened global uncertainty,” the IMF said in a statement. Meanwhile, the country’s central bank announced it would buy $1.5 billion from the government for its international reserves.
Moody's Investors Service has today changed the outlook on the Government of Colombia to negative from stable. Concurrently, Moody's has affirmed Colombia's long-term local and foreign-currency issuer and senior unsecured debt ratings at Baa2 and foreign-currency shelf senior unsecured ratings at (P)Baa2. The short-term local and foreign-currency issuer ratings were also affirmed at Prime-2 (P-2). Following a sharp deterioration in debt metrics in 2020, Moody's expects that fiscal adjustment will start in earnest in 2022 with results contingent upon a tax reform that will be discussed in 2021.
The Government of Colombia, through the National Council for Economic and Social Policy (Conpes), approved the Roads for Legality and Recovery programme for an estimated value of $2.6 billion, with which it is intended to develop the country's infrastructure and generate 330,000 jobs. It involves the intervention of 1,160 kilometers of roads in 18 departments, 17 corridors for improvement and the construction of four new projects. The work includes the construction of 89 km of new roads, which includes open-pit works, tunnels, bridges and viaducts, as well as the improvement of 1,071 km.
ISA, a Colombian conglomerate on Electric Energy Transmission, Road Concessions, and Information and Telecommunications Technology, held its Investor Day 2020, in which the company revelaed its 2030 strategy. Investments of $ 12.6 billion are foreseen and there is already a Capex committed for $ 3 bn by 2024. Growth in Ebitda by at least 70% by 2030, with expected investments of $ 2,9 billion, in roads projects in Chile, Colombia after and Peru. $ 7 billion investments in energy projects in the region in the next 10 years in Colombia, as well as Brazil, Peru and Chile.
The 2018 contingency at the Ituango Hydroelectric Power Plant (Hidroituango), which delayed its entry into operation until 2022, represents a fiscal damage of $1.1 billion, estimated the Comptroller General. The watchdog argued thae contingency was a result of failures in the planning and execution of the project, led to a fiscal damage of $836 million due to the destruction of the value of the investment, while the remaining $317 million is due to lost profits. The Comptroller recalled that the megaproject was planned for $1.7 billion, a sum that rose to $3.7 billion, and imputed charges for fiscal damage against 28 people, among which ex-governors of Antioquia, former mayors of Medellín, the former director and managers of utility company EPM, and construction firms.
Colombian and Mexican currencies hit nine-month highs on Thursday, tracking recent strength in oil markets, while most other Latin American currencies rallied on the back of encouraging economic readings from Brazil. Colombia's peso rose 1.5% after data earlier in the week showed the country's current account deficit shrank to 2.7% of gross domestic product in the third quarter.