Citibank backs out of Metro 2 financing

 WITHOUT EXPLANATION, Citigroup has backed out of financing Consortium Line 2, which is responsible for the design and construction of the second line of the Panama Metro.

The consortium, led by the   Brazilian construction company Odebrecht, is seeking alternate financing.

In addition to Citibank, other financiers of the project are Mizuho Bank and The Bank of Tokyo-Mitsubishi from Japan and the German entity Deutsche Bank.

Government officials said that Citibank was not a major part of the financing for the project, which will cost $1.8 billion.

The Central American Bank of Economic Integration could provide the financing in place of Citibank, which has declined to comment on why it backed out of the deal.

The decision comes in the midst of problems being encountered by consortium member Odebrecht, which is being investigated for corruption in Brazil, where it is headquartered. Company President Marcelo Odebrecht was recently sentenced to 19 years in prison and investigations are underway by Swiss authorities into alleged bribery money funneled through Panama.

On May 3, Fitch Ratings Rating Agency lowered its outlook for the company due to the failure to release its latest financial statements.

The consortium said the decision by Citibank will not impact the project, a sentiment echoed by the government. There has been widely expressed concern over the government continuing  to award contracts to the scandal ridden company facing investigations in many countries, A number of its senior officials have been jailed, and others are detained or under investigation.

“So far the contractor is fulfilling the contract,” the Ministry of Economy and Finance said.

It is expected to be completed in 2019.