Presentación que realizó el presidente de la ANI, Luis Fernando Andrade, en los eventos Colombia InsideOut (New York y Londres) y Colombia - Israel Bussiness Opportunities Seminar en el mes de junio de 2013.

1. Colombian Road Concession Program
2013 - 2014
Projects and Financing Issues
Luis Fernando Andrade Moreno
President
Agencia Nacional de Infraestructura
June, 2013

2. Agenda
1. The target and ground preparation
2. The plan in motion: 4th generation of
roadway concessions
3. The project financing challenge
4. The timetable

3. 0 20 40 60 80 100 120 140
Venezuela
Colombia
Brasil
Argentina
Perú
Uruguay
Ecuador
México
Chile
España
128
126
123
106
100
81
53
50
23
13
Poor Quality of Roadway Infrastructure
Source: World Economic Forum. The Global Competitiveness Report 2012-2013.
3
The difficulty: Infrastructure
deficiency

4. 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Inversión Comunicaciones / PIB Inversión Energía / PIB
Inversión Transporte / PIB
Telecom Investment / GDP
Transportation Investment / GDP
Energy Investment / GDP
4
The difficulty: Infrastructure
deficiency
Source: Own calculations using DNP investment data
Historical low investment in transportation infrastructure

5. The actions carried out by
the current Government
5
Improved legal framework
Building intitutional capacity
Moving forward our infrastructure
▪ Creation of a PPP Law (Ley 1508 de 2012)
▪ Creation of the National Infrastructure Agency (ANI)
▪ Governance
▪ Capability
▪ Design of a comprehensive infrastructure investment program
based on PPP scheme
▪ Robust structuring
▪ Improved and standardized contracts
▪ Effective project management with better controls and monitoring
systems
▪ Speeding up execution
▪ Removing bottlenecks

6. Other Government actions
• Additional actions to set up a supportive regulatory and legal
framework for private investment
– Infrastructure Law project in Congress
• Improving regulation to mitigate risks associated to land acquisition, social and
environmental management, and utility network displacements
– Additional contractual provisions to facilitate resolution of Force
Majeure events
– Expedited conflict resolution mechanism in standard contract
6

7. Agenda
1. The target and ground preparation
2. The plan in motion: 4th generation of
roadway concessions
3. The project financing challenge
4. The timetable

8. 8
- US$26 billion investment program
- Around 40 toll road PPP projects
- Construction in over 8,100 km of national roadways in the next 8
years.
The 4G
Program
How will the Government deliver on its promise
of closing the infrastructure gap?
Estimated investment profile for the Program
(US$ Billion of 2012)
$0
$1
$2
$3
$4
$5
$6
$7
2014 2015 2016 2017 2018 2019 2020 2021

9. VILLAVICENCIO
CALI
Buga
PEREIRA
Sogamoso
Palo de Letras Caucasia
MONTERÍA
SINCELEJO
Carmen de
Bolívar
VALLEDUPAR
BARRANQUILLA
CARTAGENA
SANTA MARTA
RIOHACHA
Paraguachon
San Roque
Necoclí
PASTO
Zipaquirá
Pamplona
Simití
Achí
San Marcos
San Pelayo
CÚCUTA
Girardot
PTO CARRENO
NEIVA
Puerto Gaitán
POPAYÁN
B/MANGA
Chachagüí
Espinal
ARMENIA
Ibagué
Pto. Salgar
Cáqueza
Calera
La Paila
Buenaventura
Santander
De Quilichao
YOPAL
Tame
ARAUCA
Sopó
El Secreto
MOCOA
Cartago
Planeta Rica
La Yé
Toluviejo
Cruz del Viso Carreto
Ponedera
La Paz
San Juan
Buenavista
Cuestecitas
Barbosa
Aguaclara
MANIZALES Villeta
MEDELLÍN
BOGOTA
Barrancabermeja
Remedios
Pto. Arimena
El Tigre
Pto. BerríoSanta Fé de Ant.
Bolombolo
La Manuela
Camilo C
TUNJA
Aguachica
Granada
Sisga
Existing projects
4G projects
PTO CARRENO
More than 11,000 Km
25 existing projects + 40 new
projects
National roadway network under
Concession: Existing and Upcoming
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10. •Design
•Rehabilitation, construction and/or improvement
•Operation and maintenance
•Financing
Scope
•Variable, 25 – 30 yearsTerm
•Infrastructure units with functional independence
•Size: Capex + Opex over ~US$ 50 million per Unit
Functional Units
•By Functional Unit based on availability
•Sources: Tolls and Government Contributions
•Discounts related to availability, quality and service, capped at ~10%.
•Evaluation by an experimented external auditor,
Payment
10
4G Concession Contract: Basics

11. 11
4G Concession Contract: Risk Allocation
Concessionaire’s Risks
• Construction (except tunnels)
• Operation and maintenance
• Financing
• Change in construction and operation &
maintenance input prices
• Land acquisition management (with
control and supervision of ANI)
• Insurable Force Majeure events
• Traffic (liquidity risk)
• Macroeconomic risks
• Changes in law
Shared Risks
• Construction (tunnels)
• Land acquisition (cost overruns)
• Environmental and social management
(cost overruns in environmental
compensations)
• Utility networks (cost overruns)
ANI’s Risks
• Force Majeure events
• Non insurable events (e.g. natural
disasters)
• Land acquisition*
• Social consultation*
• Environmental licensing*
• Traffic (Aggregated Income)
• Utility networks (non identified networks)
* Assuming concessionaire’s proper management

12. Agenda
1. The target and ground preparation
2. The plan in motion: 4th generation of
roadway concessions
3. The project financing challenge
4. The timetable

13. Tolls
60%40%
Projects’ income
(average expected distribution)
Public
Contributions26
Investment
(USD Billons)
Financial closing
20%
80%Debt
Equity
Investment & financing
13
Note: Preliminary and estimated values, subject to modifications, adjustments and corrections.
Needs: Funding US$26 billons to be invested during the next 8 years and repaid
with long term flows starting after construction phases
4G program financing needs

14. 14
Debt required for 4G concession program is large relative to the
Colombian financial market
Local
long term
financing
sources
Note: Values in USD Billions, Updated at Dec-2012
4G program financing constraints
21
84
76
15
40
25% 27% 139% 52%
Financing needs Commercial loans Pension Funds Insurce companies Banks' portfolio

15. 15
4G program financing:
The proposal
Structured
project
financing
4G program financing will target broad participation:
Banks, multilateral institutions, development
banks, institutional investors and private equity funds
Government is prioritizing the role of long term
investors (institutional investors):
Long term repayment flows and demand risk coverage
Mixed project funding:
Soft mini-perms loans and operating asset securitization

16. Financial Closing
Debt commitments for 1/3 of
total financing needed
- Bank loans
- Loans from other
infrastructure investors
Signing
of
Contract
Bidding
process
Pre-construction Construction O & M
Refinancing after
construction phase
- Asset Based Securities
- Long term loans from
institutional investors
End of the
contractRetribution flows
according to availability*
End of
construction
phase
certification
Refinancing during construction
phase
-Securities with credit risk
enhancement
-Loans from infrastructure
investors/funds
* Discounts are applied up to a threshold related to the infrastructure availability (availability, service level and quality standard)
Mixed financing strategy

17. …
Originators SecuritiesIssuers
…
Investors
$$$$$$
UF 1
UF m
% UF 1
% UF m
Tranche j
Inv. 1
Lead Bank/Fund
Multilaterals /
development Banks
…
Cession
Tranche k
Securitization structure
Underwriting
commitments
Inv. n - 2
Contingent
purchase
Substitution / firm
commitment
17
…

18. MODOS
• Securitization after construction is completed
• Third party guarantees for credit risk during construction phase
Construction
(Cost, licensing, and land availability)
• Predetermined discount caps affecting repayment flows
• Financing structure and sizing according to the perceived volatility from
availability payments
• Strong insurance coverage requirements
• Recurrent non-availability of infrastructure as cause for early
termination of the contract
Operational
(Non-availability, service levels and quality
standards)
• Overcollateralization
• Third party liquidity guarantees / reserve account
• Securitization with tranches / subordination
Liquidity (traffic)
• Adequate and timely causes for early termination
• Repayment of investments and expenses are covered by predetermined
liquidation formulas
• Predetermined contractual terms and procedures for takeover rights by
creditors
Early termination
Remaining Risks:
Mitigation alternatives
18

19. Agenda
1. The target and ground preparation
2. The plan in motion: 4th generation of
roadway concessions
3. The project financing challenge
4. The timetable

20. 20
Rounds
# of
projects
1Q 2012 2Q 2012 3Q 2013 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014
1st Round FONADE 4 Prequalification Bidding process
1st Round PROSPERITY 5 Prequalification Bidding process
2nd Round FONADE 7 Prequalification Bidding process
3rd Round FONADE 12 Prequalification Bidding process
2nd Round
PROSPERITY
4 Prequalification Bidding process
1st Round
ADAPTATION FUND
3 Prequalification Bidding process
2nd Round
ADAPTATION FUND
5 Prequalification Bidding process
4G Program Timetable

21. Thank You
www.ani.gov.co
Twitter
@ANI_Colombia
Facebook
http://www.facebook.com/agencianacionaldeinfraestructura
http://www.facebook.com/luisfernando.andrademoreno
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