Active Development AidData Chinese Aid

[Cancelled] [China Co-Financing Fund] IDB Invest administers $25 million loan from CHC to Altán Redes for Red Compartida PPP

$25M USD

Funder	People's Bank of China (PBC)
Recipient Organization	Altán Redes S.A.P.I de C.V.
Country	Mexico
Start Date	Sep 23, 2019
End Date	Jun 19, 2028
Duration	3,192 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`91460`

Grant Description

[Cancelled] [China Co-Financing Fund] IDB Invest administers $25 million loan from CHC to Altán Redes for Red Compartida PPP On September 23, 2019, the private sector institution of the Inter-American Development Bank (IDB) Group, IDB Invest (formerly Inter-American Investment Corporation, or IIC), signed a loan package with Altán Redes S.A.P.I de C.V. for the Red Compartida, a public-private partnership (PPP) with the Mexican government to create a 4G LTE mobile communications network.

The amount approved for the loan package on April 24, 2018 was the equivalent of $50 million from IDB Invest's own funds in both USD and MXN, and 25 million USD from the China Co-Financing Fund for Latin America and the Caribbean (CHC).

However, the project is listed as "Inactive" on the IDB Invest website, there is not the usual press announcement about the signing of the loan contract, and the IADB project page is no longer available. Thus, it appears the loan was cancelled, though it is unclear if disbursements were ever made.

The Red Compartida PPP was intended to provide mobile broadband coverage to at least 92.2% of the population in Mexico and improve broadband speed, quality, and price.

Altán Redes received the 20-year concession contract in November 2016 by the Mexican Ministry of Communications and Transportation to implement the project. About 7 billion USD was the total financing estimated to be required for the 20-year concession period. The Red Compartida first went live in March 2018.

However, on or about July 13, 2021, Altán Redes filed for bankruptcy, which was approved in Mexican courts by November 2021. At the time, only about 69% of the population had coverage, and the company was behind on its coverage goals.

In June 2022, a bailout was approved, and the projected date of the 92.2% population coverage goal moved back from January 2024 to January 24, 2028. Due to the scope of the project, a large number of co-financiers participated.

In April 2017, Mexican development banks Banobras, Nafin, and Bancomext provided 13 billion pesos in loans, with a 14-year maturity period (equivalent to $690 million).

Huawei and Nokia provided loans worth $850 million in April 2017 as well, with maturity at 10-years, potentially in a syndicate led by Spain's Santander (see Record ID#69612). Scotiabank served as a trustee bank, and Citibanamex as the administrative agent.

As of April 2017, 765 million USD in capital was also available from various unspecified investors, both local and international, and private and public. The Development Bank of Latin America (CAF) also provided a 50 million USD loan in October 2018. The IFC contributed financing at an unknown date, or may have provided capital included in the 765 million USD.

Morgan Stanley and Mexican telecommunications operator Megacable also provided financing in some capacity, likely through capital contributions as well.

📋 Staff Comments

On the IDB Invest website, the project was referred to as '12088-01: Altán Redes S.A.P.I. de C.V.' On the IDB website, it had project code ME-L1285, and the loan number for the CHC financing was 4516/CH-ME.
The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Project ID#86526.
IDB and IDB Invest originally announced a 150 million USD loan, to use capital from both institutions, on July 27, 2017. However, the loan operation ended up splitting into the one provided by the IDB (project ID ME-L1284), which is listed as closed and has a project completion publication, and the one provided by IDB Invest and the China Co-Financing Fund, which is listed as inactive (project ID ME-L1285 and 12088-01). The IDB Group loan (4666/OC-ME) provided 100 million USD from the IDB's ordinary capital to Bancomext to help cover their loan contribution, which in turn provided it to Altán Redes, and was guaranteed by Mexico's Ministry of Finance and Public Credit (see 'CONTRATO DE PRÉSTAMO No. 4666/OC-ME', 'FIRST OPERATION UNDER THE CCLIP...Loan Proposal' pg. 12, and 'ME-L1284_PCR_Aprobado_publico', page 2-3 of add-on at end of document, pages 37-38 if downloaded as PDF). More specifically, it utilized a 1 billion USD conditional credit line it had set aside for infrastructure in Mexico (Línea de Crédito Condicional para Proyectos de Inversión para el Financiamiento de la Infraestructura Productiva y la Sostenibilidad en México, ME-O0004).
Project status assumed to be cancelled - while the CHC financing was approved (which AidData has determined matches Pipeline: Pledge in our methodology), there is no confirmation that the financing was in the loan contract which was actually signed. Given that the 'Financing Amount' and 'Syndicated Amount' on the IDB Invest project page match the approved amounts (50 million USD and 25 million USD respectively), it has been assumed that the loan contract did include CHC financing. However, it should be noted that the IDB Invest project pages often contain out of date information. Thus, it is possible that no CHC funds were committed (resulting in a status of Pipeline: Pledge per AidData's 2.0 coding methodology, rather than cancelled).

📚 Sources & References

EVALUACIÓN DEL PROGRAMA DE PAÍS: MÉXICO 2013-2018
Programa para el Financiamiento de la Red Compartida de Telecomunicaciones (ME-L1284/4666/OC-ME) Informe de Terminación del Proyecto (PCR)
Altán Redes S.A.P.I. de C.V.
PR-4629 [IDB Board of Directors/Public Disclosure for Financing of the Shared Telecommunications Network]
Red Compartida/Altan (IADB-ME-L1285)
Altan Redes S.A.P.I. de C.V. (IIC-12088-01)
IADB-ME-L1285 Red Compartida/Altan
IIC-12088-01 Altan Redes S.A.P.I. de C.V.
Tower Companies Transform Cellular Services in Latin America and the Caribbean
ME-L1284 : First Operation Under the CCLIP for the Financing of the Shared Telecommunications Network
Resolución DE-90/18 CONTRATO DE GARANTÍA entre los ESTADOS UNIDOS MEXICANOS y el BANCO INTERAMERICANO DE DESARROLLO Préstamo al Banco Nacional de Comercio Exterior
S.N.C.
Institución de Banca de Desarrollo (BANCOMEXT)
ME-L1284_PCR_Aprobado_publico: Informe de Terminación del Proyecto (PCR)
ALTÁN Redes completa con éxito la financiación de la Red Compartida
CAF becomes newest lender in massive Altán Redes syndicated loan
Loan Proposal: MEXICO CONDITIONAL CREDIT LINE FOR INVESTMENT PROJECTS (CCLIP) FOR THE PROGRAM TO FINANCE PRODUCTIVE INFRASTRUCTURE AND SUSTAINABILITY IN MEXICO (ME-O0004) FIRST OPERATION UNDER THE CCLIP FOR THE FINANCING OF THE SHARED TELECOMMUNICATIONS NETWORK (ME-L1284)
CONTRATO DE PRÉSTAMO No. 4666/OC-ME entre BANCO NACIONAL DE COMERCIO EXTERIOR
S.N.C.
INSTITUCIÓN DE BANCA DE DESARROLLO (BANCOMEXT) y el BANCO INTERAMERICANO DE DESARROLLO Programa para el Financiamiento de la Red Compartida de Telecomunicaciones
Red Compartida
Mexico bails out bankrupt shared network operator
Altan Redes files for bankruptcy protection in Mexico
Mexican judge declares ALTAN Redes bankrupt
Altán Redes goes to bankruptcy to request extensions from creditors and ensure deployments
Altán Redes receives 50 million dollars more
Authorization of $50 million dollars for Altán Redes
IDB to monitor impact of Mexico's Red Compartida
AWARDS: BEST LOAN
BEST SPONSOR
BEST INFRASTRUCTURE FINANCING: MEXICO Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.