With the signature of Bogotá's Mayor, Claudia López; the Metro Company Manager, Leonidas Narváez; and the Executive President of the Development Bank of Latin America and the Caribbean (CAF), Sergio Díaz-Granados; the Colombian capital has secured a framework credit agreement of USD $255 million to finance Bogotá's 2nd Metro Line (B2ML), which will benefit approximately 2.5 million users, generate significant travel time savings for passengers, and contribute to improving air quality as well as reducing road accidents.
The credit line will be available for a period of five years, renewable for periods of up to two years, and will be part of the resources that will finance the concession contract for the construction and operation of B2ML, which will run from 72 Street in the Chapinero district to the Suba district, also benefiting the Barrios Unidos and Engativá districts. It is expected that this contract will be awarded in the first semester of next year.
The signing of the framework agreement took place during the EU-CELAC Summit of Heads of State held in Brussels, Belgium, where leaders from both sides of the Atlantic are discussing new cooperation and financing mechanisms to boost relations between Latin America, the Caribbean, and the European Union.
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In this tweet, Mayor Claudia López refers to the signing of the framework credit agreement for USD $255 million for 2nd Metro Line:
Firmado el aporte de 255 millones de dólares de @AgendaCAF para la segunda línea del @MetroBogota subterráneo a Suba/Engativa!
— Claudia López Hernández (@ClaudiaLopez) July 17, 2023
3 proyectos de Bogotá han quedado priorizados en el globalwateway de inversiones Unión Europea y CELAC: 2da Linea de Metro, PTAR Canoas y Ciberseguridad! pic.twitter.com/1M4eHW5fQZ
"Today, we are finalizing the second of the four multilateral bank credits that support the contracting of Bogotá's 2nd Metro Line. It took us 40 years from the first study to the contract of the first line. It took us three years from the first study to the realization of this second line. Colombia and Bogotá are learning to take action instead of just speculating," said the Mayor.
Representing the President of Colombia, Gustavo Petro, and the National Government, the Minister of Commerce, Industry, and Tourism, Germán Umaña Mendoza, attended the signing ceremony of the agreement. He highlighted the city's commitment to the environment.
"The leadership of Bogotá in sustainable, inclusive development is undeniable, and this project, which is an underground metro, will ensure these characteristics for the people of Bogotá and serve as an example for Latin America and the world," emphasized the Minister.
Commenting on the scope and benefits of the credit line, the CAF leader celebrated the agreement signed in Brussels and explained the reasons why they advanced with Bogotá in this endeavor, for which the bank he represents is fully committed to supporting.
"CAF is one of Bogotá and Colombia's great allies in fulfilling the 2030 Agenda and sustainable development. With this loan to the Mayor's Office, we are promoting sustainable, clean, safe, and efficient transportation that improves urban travel times and has a positive environmental impact. The Bogotá's 2nd Metro Line will contribute to the well-being of all Bogota citizens, creating a more inclusive society that offers more opportunities for everyone," said Díaz-Granados.
With a length of 15.5 km, of which 14.3 km are underground, 11 stations, a workshop yard, and 25 trains with a capacity of 1,800 people each, it is expected that the 2nd Metro Line will significantly improve mobility in the city, encouraging the use of public transportation and reducing congestion in the districts of Chapinero, Barrios Unidos, Suba, and Engativá. This will contribute to stimulate economic growth and improving the indicators of security, accessibility, integration, inclusion, connectivity, and competitiveness in Bogotá.
In August 2022, the Nation and the City signed a co-financing agreement guaranteeing resources for B2ML amounting to $34.93 trillion Colombian pesos, to be contributed over the next 30 years, equivalent to USD $8,772 billion constant as of December 2021.
Subsequently, on May 9th, the Ministry of Finance officially informed the city of Bogotá that the national guarantee was ready to support the financing of the megaproject. In fact, the first public credit operation was signed with the European Investment Bank (EIB) for an initial value of USD $50 million in April of this year.
The project has been evaluated from different perspectives to ensure its viability. From a technical standpoint, studies have been conducted to support its implementation through an integral concession. Additionally, critical aspects have been identified, such as geological-geotechnical management during the construction phase, which requires a contractor with the appropriate experience. From an institutional point of view, the Bogotá Metro Company has a robust structure and the necessary technical and organizational capabilities for its execution.
Regarding socio-environmental aspects, appropriate measures to mitigate environmental and social impacts have been implemented, considering that the financing provided by CAF qualifies as green financing. It is estimated that the operation will reduce greenhouse gas emissions by over 88,400 average tons per year, which will have a positive impact on public health. A decrease of 277 accidents per year is also expected once operations begin.
The development of the project is aligned with the United Nations' Sustainable Development Goals (SDGs) and the 2030 Agenda, particularly Goal 11: "Sustainable Cities and Communities," by providing a safe, inclusive, affordable, and sustainable transportation system that improves air quality and expands transportation options for approximately 2.5 million people living in this area of the city. It also aligns with Goal 13: "Take urgent action to combat climate change and its impacts," due to the emissions reduction that the operation will entail.
The B2ML, along with Bogotá's 1st Metro Line (B1ML), is part of the strategic projects for the development and consolidation of the city's transportation system. The B1ML is already under construction, while the B2ML is in the contracting process with multilateral banking standards, which began on May 15th with the prequalification opening, will continue on September 29th with the international public tender, and will be awarded in March 2024.
"You don't know what this signing means for the 8 million Bogotá residents because the metro has undoubtedly been the most cherished and fought-for dream of the people of Bogotá. We are very excited to be able to inaugurate the first line in 2028, and with this step, we are making the second underground line a reality," emphasized the Mayor López after the signing of the agreement.
With this achievement in Brussels, priority projects in Bogotá, such as the 2nd Metro Line, the Canoas Wastewater Treatment Plant, and cybersecurity initiatives, have been included in the Global Gateway, a new European Union strategy to promote smart, clean, and secure investments in the transport, digital, and energy sectors. Through this strategy, the European Union will mobilize up to €300 billion by 2027 for sustainable and high-quality projects, contributing to global competitiveness and the fulfillment of the United Nations' 2030 Agenda and its Sustainable Development Goals.
What is CAF?
CAF, or the Development Bank of Latin America and the Caribbean, has the mission to promote sustainable development and regional integration through financing projects in the public and private sectors, providing technical cooperation and other specialized services. Established in 1970, it currently comprises 20 countries, including 18 from Latin America and the Caribbean, as well as Spain and Portugal, and 13 private banks. CAF is one of the main sources of multilateral financing and a significant generator of knowledge for the region.
This is the complete video transmission of Mayor Claudia López announcing the signing of the agreement between the Metro Company and CAF for the construction of 2nd Metro Line. Watch it here:
