Katie Llanos-Small reports in LatinFinance about Panama’s upcoming projects.
The Central American sovereign advances financing for a new bridge over the canal, prepares to open bids for construction companies, Finance Minister Dulcidio De La Guardia tells LatinFinance in an interview.
Panama will begin taking bids from construction companies in the coming weeks for a bridge over the canal and a new line on the metro, the country’s finance minister told LatinFinance.
Goldman Sachs was mandated to arrange non-recourse financing for the $1.2bn Panama Canal bridge project. The financing package for the toll-road concession should be completed in Q1 of 2018, Dulcidio De La Guardia said in an interview in New York.
“We are still working with Goldman in terms of what is the best combination of financing sources,” he said.
The bridge will comprise a six-lane highway and a subway line, connecting the west of Panama City with the center of the capital.
“I want to invite all major construction companies to look at the project and bid for it,” he added. Bidding documents are set to be published in the next few weeks.
Meanwhile, JICA and the government of Japan have provided complete financing for a third metro line, De La Guardia added. The 20-year loan of up to JPY29.6bn ($266m) pays a rate of 1.05% under Yen Libor.
Panama secured direct financing on the condition that the trains are sourced from Japanese companies. The construction company, however, could be from another jurisdiction, and bidding documents for this project will also be released in the coming weeks, he said.
The sovereign needs no new cash from international bond investors this year, but does not rule out returning to the market for a liability management transaction, De La Guardia added.
De La Guardia, in the US for a short visit, said he did not expect the US to reopen negotiations on the free trade agreement between the two countries. Despite the US’s new protectionist stance, such a move is unlikely to be a priority, he said.
“As a matter of fact, Panama runs a significant deficit with the US in terms of trade deficit. So we don’t believe this is something that is going to come on their agenda.”