Developing Colombia

The government of Colombia has selected an Ashmore Investment Management-led consortium to manage a $500 million fund supporting the development of transport, energy and other infrastructure projects. Ashmore is an emerging markets-focused investment firm headquartered in London.

Ashmore and local investment bank Inverlink have been selected as managers of the Infrastructure Fund of Colombia by the Colombian government in a private competitive selection process, with Macquarie Capital as its technical adviser. All three have agreed to commit capital to the fund either directly or through managed entities.

The fund is being sponsored by the Colombian government in conjunction with two multilateral institutions in the region – the Inter-American Development Bank (IDB) and the Andean Development Corporation (CAF). It will have initial capital of $500 million and will be structured as a private equity fund under Colombian law.

The Colombian government is supplying 25 percent of the fund's capital according to Bibiana Lara, Colombian public credit director at IDB. IDB and CAF will in combination provide an additional 25 percent of the capital although the organisations' boards have not yet formally approved the investments.

Additional investment is being sought from local pension funds and insurance companies.

The Ashmore-Inverlink consortium beat proposals from four other parties. Their identities have not been disclosed, but sister publication InfrastructureInvestor learned during the selection process that Latin America-focused private equity firm Conduit Capital was among the other proposers.

The objective of the fund will be to support the development of projects and companies in the transport, energy, water, sanitation, communications and logistics sectors of the Colombian economy.

The three sponsoring parties signed a memorandum of understanding in 2008 to find ways to finance infrastructure in Colombia due to its growing needs in that area.

An Ashmore spokesperson declined to comment on the fund, saying that the firm's selection as manager was not “set in stone”.

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