Colombia Ready to Tap $5 Billion Credit Line for U.S. Investment
(Bloomberg) -- Colombia plans to present at least seven projects this year that can be financed using part of a $5 billion credit line with a U.S. development bank, according to its top diplomat in Washington.
With the pandemic disrupting global supply chains and highlighting the risks of dependence on China, Colombia is leveraging its geographical proximity to the U.S. to attract more foreign direct investment, Colombia’s Ambassador to the U.S. Francisco Santos said in an interview.
“You need resilient supply chains, and that works in our favor,” said Santos. “We’re positioning Colombia so it’s seen as a hub. The geopolitical and economic moment is favorable.”
Colombia has been offering tax incentives and making it easier for foreign companies to invest as part of a broader government plan to attract $11.5 billion per year in non-hydrocarbon-related foreign direct investment by 2022, up from an average of about $9 billion.
Four projects have either already been presented to the U.S. International Development Finance Corporation for review or are in the final stages of preparation, said Santos. And while declining to identify them, he said they are in the energy, forestry, agrochemical and dairy industries.
The DFC, as the development bank is known, is a new federal agency with a $60 billion war chest to help businesses expand into emerging markets and reinforce U.S. foreign policy.
For now, Santos says efforts are focused on projects that are close to Colombia’s Caribbean or Pacific coast -- specifically near the cities of Barranquilla, Cartagena and Cali -- and that have the advantage of being a few days away by ship from any major U.S. port, compared to more than 25 days away from Asia.
Colombia has also been competing for attention from China. The Asian nation has invested heavily in Venezuela and Ecuador, but until recently its ties with Colombia -- the closest U.S. ally in the region -- weren’t as strong. That began to change in the last couple of years with Chinese companies committing billions to the country, winning bids to build Bogota’s first metro line and a regional rail line, among other deals.
The credit line could be an opportunity for U.S. companies to invest in areas that it had abandoned in the region, such as infrastructure, according to Santos.
“We’re in the most important stage of rebuilding the relationship the U.S. has with Latin America,” said Santos. “A relationship not based on assistance, but on trade and investment.”
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