Three banks will finance Canal Fourth bridge

Three banks will provide the $1.113 billion to construct the watered-down version of the fourth bridge over the Panama Canal a decrease of $291 million, after changes to the original design.

 Rafael Sabonge, Minister of Public Works (MOP), said that the Panama Cuarto Puente Consortium (CPCP) has already received a payment of $114 million for which the financing was provided by Banistmo, Santander, and Mizuho.

Sabonge pointed out that the project did not have funds for its execution beyond the advance payment received by the contractor, for which it was decided to separate its construction from the metro line 3 project, so as not to delay the execution of the monorail.

“There was no financing for the fourth bridge as the Metro has had for its projects and in the event that the construction of line 3 is delayed due to delays in the bridge, the State would be sanctioned with 7 million dollars a month Sabonge warned.

For the contractor to resume work on the structure, the three banks will structure a bridge loan of 200 million dollars.

Additionally, it was agreed that the three entities will carry out an issue in the international market to raise the funds that the contractor will need to carry out the work.

In the addendum signed by the MOP with the contractor, made up of the companies China Communication Construction Company (CCCC) and China Harbor Engineering, an item of $145 million was established to cover associated costs.

The minister explained that the financing costs will be determined by the interest rate of the bonds that the banks will issue.

“There is projected an overdemand for the bonds, so this should lower the interest rate, a result similar to the bond issues issued by the country is expected,” he said.

According to the terms agreed by the Ministry of Economy and Finance (MEF) and the three banking entities, the financing will begin to be paid in 2026, two years before the estimated date of completion of the works.

Toll bridge
In the addendum, maintenance costs were eliminated, since once the bridge is built it will be given in concession to the National Highway Company.

A toll will be established to generate the funds that will be used to pay for construction and maintenance.

In addition to subtracting the two central lanes through which the monorail of the third line would pass, the MOP asked the contractor to modify the alignment of the cable-stayed structure so as not to affect the container yards that the Panama Ports Company has under concession.

If there are no new delays, the construction of the fourth bridge would end in 2028.