Since the start of the revelations of the corruption scandal in which the Brazilian construction company Odebrecht was involved, doubts have arisen about how this could affect financing of the construction project for Line 2 of the Panamanian Metro, whose contract was awarded in June 2015 under the  turnkey format.

See "Odebrecht: An Open Secret"

Prensa.com reports that "...After the exit of Citi group from the group of banks who were to finance the project, the consortium said "it is in negotiations with international banks'. The consortium's efforts to secure project funding are happening at a time when the construction company Odebrecht is losing credit capacity due to the corruption cases in which it is involved."

In mid-2016   "... The National Bank of Panama (BNP by its initials in Spanish) bought invoices recognized as Certificates of No Objection (CNO) issued in favor of Consorcio Línea 2. The operation resulted in the consortium obtaining $120 million in advance, as the payment of funds was scheduled for November. With the transaction, known as factoring, the BNP benefits from charging interest. It is the first time the state agency has made a transaction of this sort with the consortium, which in the past has always turned to private banks."

Source: Prensa.com

More on this topic

Citibank Will Not Finance Line 2 of Panama Metro

May 2016

The consortium formed by Odebrecht and the Spanish company FCC will have to find a new bank to grant the funds that Citibank was supposed to provide under the original financing structure.

The exit of Citigroup from the $1,857 million financing structure for the design and construction of Line 2 of the Panama Metro could be due to the recent deterioration in the risk perception of the Brazilian company Odebrecht, whose rating Fitch cut on May 3, citing the "... the increased risk and uncertainty associated with lack of publication of the financial statements of the company at the end of April."

Metro Line 2 Contract Signed with Odebrecht and FCC

July 2015

Metro de Panama has signed with the consortium CL2 a contract for $1.857 million for the construction of Metro Line 2, and now only needs approval from the Comptroller General.

From a statement issued by Metro de Panama:

In view of its commitment to transparency, Metro de Panama reports that after an extensive process it today completed the review and signing of the Contract for construction of Metro Line 2.

Go-Ahead for Odebrecht in Panama

July 2015

In granting approval of the funding proposal put forward by the consortium Odebrecht / FCC for Metro Line 2, the Panamanian government has cleared any doubts about the participation of the Brazilian company.

The Minister of Economy and Finance, Dulcidio De La Guardia, told Prensa.com that "...

FCC-Odebrecht to Build Panamanian Metro

October 2010

Line 1 Consortium was awarded construction of the first line of the Panama Metro.

The winning consortium's proposal was $ 1,446 million, higher than the one presented by Italian Group Metro Panama which was 1,401 million.

Prensa.com reports, "However, the proposed technical qualification by Line 1 Consortium, which was more important, received 578 points and his opponent 358 points."