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MEDELLIN Aug 14 Colombian financial entities and multilateral lenders will be key to raising the $25 billion needed to fund a massive highway project the government hopes will modernize the nation and boost economic growth, Finance Minister Mauricio Cardenas said on Thursday.
Cardenas' comments come just days after he postponed the sale of the government's majority stake in electricity generator Isagen for as long as a year. The privatization aims to raise as much as $3 billion for the so-called fourth generation, or 4G, infrastructure project.
"It's essential for this program to be as big as it was designed to be, that its financing works well, and for that we need the banks, pension funds," Cardenas told an industrial conference in Medellin.
The government is pinning hopes that spending on roads and tunnels will keep the economy growing as revenue from the oil sector begins to recede. GDP accelerated 6.4 percent in the first quarter on the back of growth in the construction sector as growth in energy began to slow.
The International Finance Corporation, the financing arm of the World Bank, and the Corporacion Andina de Fomento have agreed to help fund the project, he said.
Cardenas said credit rating agencies have signaled that construction of the roadways is key to Colombia's sovereign debt rating being boosted from BBB. (Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Helen Murphy; Editing by Lisa Shumaker)