Sustainable Cities in Colombia and Peru


The private sector can be a source of urban infrastructure financing to close the growing infrastructure gap in Latin America. The IFC LAC Sustainable Cities Program will provide advisory services to support selected cities in attracting the private sector to develop a pool of implementable and bankable high impact infrastructure projects.

Country/region Topic Period Budget
Colombia
Peru
Urban infrastructure and utilities
01.10.2016 - 31.12.2020
CHF 5'700'000
Background The availability and quality of urban infrastructure and related services constitute an essential basis for enhancing competitiveness and productivity, creating jobs, and reducing poverty, environmental and climate change impacts.Despite this fact, public investment in infrastructure in Latin America and the Carribean (LAC) has declined in the last 30 years, leading to an infrastructure gap of considerable proportions. Many cities, regional governments and utilities are increasingly viewing the private sector as a source of urban infrastructure financing as well as expertise to improve the quality and efficiency of service provision.
Objectives The IFC LAC Sustainable Cities Program aims to establish strategic partnerships with selected large cities, focusing on Colombia and Peru. IFC will provide advisory services and capacity building to support selected and creditworthy cities to develop a pool of implementable and bankable high impact infrastructure projects, which are structured and designed according to international best practice. The program aims to move cities from ad-hoc development of individual projects to the adoption of a more strategic approach to urban planning and pipeline development. The private sector shall be involved either by participating through a Public-Private Partnership (PPP) or by providing commercial financing for the project. The expected impacts of the Program are better living conditions and economic benefits from the improved infrastructure services for the population in the target cities.
Medium-term outcomes Improved efficiency in urban services (e.g. transport, water, waste, energy)Private sector participation in the cities’ infrastructure increased Infrastructure projects prioritized based on pipeline, per cityCapacities of city staff have been built so that they can work by them selves on similar projects
Results

Expected results:   analysis of the municipalities’ infrastructure projects to build a pipeline of high impact infrastructure projects: energy (e.g. power distribution- street lighting)- water and sanitation- solid waste- urban transport- social infrastructure (education and health) in projects that incorporate green building features.define the most appropriate business model to foster the participation of the private sector for the implementation of the prioritized project. Two general options/business models are available (1) a Public Private Partnership (e.g. a concession)- or through (2) a procurement by the city financed through commercial (private) financingadvisory services to support the city and tackle their technical and financial constraints in structuring the identified projectstraining and coaching of city staffpromote a dialogue on the role of the private sector in the financing and provision of municipal services3-4 PPP projects7 city procurement projects with private financing


Directorate/federal office responsible SECO
Credit area Development cooperation
Project partners Contract partner
  • International Finance Corporation


Budget Current phase Swiss budget CHF   5'700'000 Swiss disbursement to date CHF   0 Budget inclusive project partner CHF   14'000'000
Project phases Phase 1 01.10.2016 - 31.12.2020   (Current phase)