Bolivia embarks on natural gas distribution project

The Andean Development Corporation will act as investment bank in the bidding process that will make possible 250,000 natural gas connections in various Bolivian cities within five years. The investment in the project is estimated at US$300.

The CAF and the Bolivian Ministry of Mining and Hydrocarbons signed an agreement under which the multilateral organization will provide investment bank services to implement the bidding process for the project to lay natural gas distribution networks in Bolivia´s main cities.

The government plans to install 250,000 connections within five years in a massive nationwide expansion of the use of natural gas through the conversion of commercial and domestic energy consumption. The project will have a favorable economic effect on homes and productive units, and a social impact since it will improve the quality of life of Bolivia´s citizens.

In its role as investment bank, the Corporation will give advice and structure the bidding process, which is expected to end in the last quarter of the year. The project to lay natural gas distribution networks in the main Bolivian cities requires an investment of around US$300 million.

Under the agreement, CAF´s work as investment bank will focus on three specific tasks: first, defining the strategy to enter the capital market, which requires collection of technical, legal, financial and regulatory information, and contacts with the sectors involved in the project (producers, operators, communities and local governments, among others).

The second task is to prepare an economic model to determine the final negotiating parameters. The third responsibility is to execute the bidding process which involves definition of the desired investor profile, contacts with potential investors, preparation of the promotion documents, presentations inside and outside the country, assistance with the preparation of the bidding conditions, and advice on reception, evaluation and qualification of bids.

CAF´s contribution to this project falls within its commitments to the Bolivian government to support initiatives aimed at reactivating the economy, generating employment, reducing poverty and improving the quality of life.