CAF approves USD 300 million to promote rail transport, sustainable mobility and logistical efficiency in Colombia

CAF, Development Bank of Latin America and the Caribbean, has granted a loan of up to USD 300 million to the Republic of Colombia to finance the Program to Support Railway Reactivation, Sustainable Mobility and Logistics Efficiency. The operation, approved in the framework of the CLXXXV Board of Directors Meeting, represents a confirmation of CAF's support for the country's strategy to transform its transportation infrastructure and move toward a more sustainable, inclusive and efficient model.

The program responds to the structural challenges facing Colombia's transportation sector. The country's rail network remains underutilized, while most of the country's cargo is transported by road, generating logistical cost overruns that directly affect the competitiveness of Colombian companies vis-à-vis their regional peers. The high dependence on land transportation is also reflected in high road accident rates with serious economic and social consequences. In urban areas, the transition to clean technologies in public transportation is progressing unevenly, concentrated mainly in the country's capital, while intermediate cities require support to modernize their fleets and improve the quality of service.

"This program gives continuity to CAF's commitment to Colombia's sustainable development.We are backing a comprehensive vision that will reactivate rail transport as the backbone of intermodality, promote the electrification of public transportation, and reduce the logistics costs that today limit the country's competitiveness. It is a commitment to territorial connectivity, social equity and environmental sustainability that will transform the way Colombia moves and connects with the world," said Sergio Díaz-Granados, CAF's executive president.

The structure of the program includes support for the comprehensive modernization of the regulatory and institutional framework of the railway sector, including the establishment of a National Railway Agency, updating of laws and decrees, consideration for the declaration of strategic importance of priority projects, among others. This is complemented by actions aimed at strengthening urban and regional public transportation systems by incorporating clean technologies and improving their financial sustainability.

In terms of road infrastructure, the program considers the recognition of actions to implement advanced design and signaling methodologies that contribute to the reduction of accidents, as well as the promotion of alternative fuels. These efforts are articulated with initiatives to strengthen intermodality by promoting river transport, developing specialized logistics infrastructure, and modernizing the regulatory framework for the provision of services for logistical efficiency.

The financing granted by CAF recognizes strategic initiatives, which are aligned with the National Development Plan 2022-2026 "Colombia World Power of Life," as well as with long-term sectoral planning instruments, particularly the Intermodal Transportation Master Plan and the Railroad Master Plan.

The National Planning Department will act as technical coordinator of the program, ensuring coordination among the different entities involved, including the Ministry of Transportation and the Ministry of Commerce, Industry and Tourism, guaranteeing the effective implementation of the planned interventions and compliance with the established objectives.

This operation constitutes a significant contribution to national efforts to improve territorial cohesion, reduce social and economic gaps between regions, and advance in the fulfillment of international commitments regarding climate change mitigation and adaptation. The program will facilitate the transformation of the transportation sector towards a more efficient, competitive and sustainable model, generating substantial benefits for the country's economic and social development.