The Multilateral Investment Guarantee Agency (Miga) has issued a guarantee to JP Morgan for a loan that it is providing to a Colombian state-owned enterprise for a new port in Antioquia.

The Miga guarantee covers a US$103.7mn facility being provided by JP Morgan to Financiera de Desarrollo Nacional (FDN), a government-backed infrastructure development bank, which will in turn provide debt financing to Sociedad Portuaria Puerto Bahia Colombia de Urabá for the construction and operation of a new, privately managed port in the Gulf of Urabá in the northern part of the region. The guarantee covers a period of up to 15 years.

Under the terms of the guarantee, JP Morgan is protected against the losses that would result from FDN’s failure to make a payment under the non-honouring of financial obligation by a state-owned enterprise coverage offered by Miga.

“The guarantee is vital at a time when financing costs for the Latin America and Caribbean region have sharply increased and liquidity has become scarce. The guarantee allowed FDN to secure US dollar funding from JP Morgan, a major participant in international capital markets, for a key infrastructure project at a favourable cost that FDN would be unable to obtain without Miga’s support,” says Miga in a statement.

“JP Morgan was delighted to structure a financing enabling FDN to offer support in the infrastructure sector where long tenor financing at competitive terms is a key requirement,” adds John Meakin, global head of export and agency finance at JP Morgan.

When the port is completed, at an estimated cost of US$672mn, it will become the main outlet for banana and agricultural exports from Urabá. In addition, given the port’s location and expected savings in transportation costs for exporters, Miga says that the port will also handle a major portion of cargo from the cities of Medellín, Bogotá, and their surrounding areas. Overall, the project is expected to generate over 1,200 direct jobs during construction, 700 direct jobs during the operation stage, and an estimated 14,000 indirect jobs.