Colombia is trying to breathe new life into its Fourth Generation (4G) P3 highway program by selling bonds and state assets to partially replace the drop in oil revenue that has depleted the funding available for infrastructure. The Colombian government has also moved to allow local pension funds to invest in 4G highways.
Colombia’s oil driven export income accounted for about 50% of total foreign cash earnings when the US$25-billion 4G program of 25 roads was rolled out three years ago. The dollar income had also funded the dollar component of availability payments Colombia made to its highway operators. But the oil price shock pared the value of oil exports to some US$8 billion in 2015, a quarter of pre-crisis revenue. That prompted Colombia to put the brakes on the 4G plan, whose cost meantime had surged to US$35 billion with the inclusion of ten more roads.