Mendoza assists Barranquilla in €50m credit granted by AFD
Mendoza Abogados has assisted the District of Barranquilla in connection with the external borrowing contract with the French Development Agency (AFD) for €50 million for the budgetary support to the 2020-2023 Development Plan “Soy Barranquilla” (I am Barranquilla).
The transaction, closed on 27 December, involved credit structuring and negotiations with the AFD and the Ministry of Finance and Public Credit. The negotiation lasted 10 months, due to the change of government and finance portfolio in Colombia, and also contains an implicit hedge to manage the exchange rate and interest rate risk. This means that, from the moment of disbursement, the District of Barranquilla will not be exposed to these risks thanks to the hedge that the AFD will take directly with a third party.
This operation marks a milestone in terms of structuring and authorisations of public credit in Colombia, since it is one of the first synthetic credits authorised by the Ministry of Finance and Public Credit to a public entity in the country.
Mateo Mendoza (pictured), lead partner of the operation indicated that “this is an operation that […] opens the way for other state entities to access synthetic products such as the one structured by the AFD in this opportunity.”
With this financing, which is in addition to a first loan by AFD to the District of Barranquilla for €120 million, support is given to the programmes of biodiversity, environment and risk management; and social inclusion of the District of Barranquilla, which is the 4th largest city in Colombia in number of inhabitants. In this way, it is expected to contribute to the preservation and enhancement of biodiversity through the environmental restoration of the Mallorquín lagoon, to the adaptation to climate change, in particular the component of flood control and knowledge and response to natural hazards.
Mendoza’s team was led by partner Mateo Mendoza, with support from associates Luis Tolosa and Santiago Cañas.
