Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla

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In October 1996 the municipality of Barranquilla, Colombia, sold a 60.4% stake in mixed water and sewage operator Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla SA ESP (AAA, or Triple A) to private group Interamericana de Aguas y Servicios S.A. (INASSA). AAA held a concession for providing water distribution, sewerage service and rubbish collection to the 1.4 million people living in Barranquilla. The Barranquilla municipality retained a 35.1% stake in AAA and 4.5% of the shares were owned by small private local investors. INASSA was 75 percent owned by the Spanish company Canal Extensia S.A., and 25% by Soluciones Latinoamericanas de Agua S.A. (SLASA). In turn, Canal Extensia S.A. was 75% owned by the public utility of the Province of Madrid, Canal de Isabel II, and 25 percent by Tecvasa, a group of Spanish companies. SLASA was owned mainly by a wide group of businessmen from Barranquilla. AAA was created in 1991 as a mixed company. The company’s operator and main shareholder was the Barranquilla municipality, which held an 89 percent stake. In 1993, AAA was awarded a 20 year concession for the water and sewage infrastructure in Barranquilla.In July 2000, the concession contract was extended for 20 years starting in Oct 2013 and ending in Oct 2033. Under the 1993 concession deal AAA was to pay a monthly lease fee of 1.5% of its revenue. The concession also required AAA to extend water and sewerage services in the southwest of Barranquilla, which connected 350,000 low-income inhabitants to the network. The required service expansion investments (the Suroccidente project) were first financed through short-term and foreign currency debt, which created mismatches of maturity and currency on the project company’s balance sheet. In 2003, AAA attempted to strengthen and stabilize its financial position through a senior bond issue worth the equivalent of $63 million. The issue had a ten year maturity date and was backed by a partial guarantee from the International Finance Corporation (IFC), which covered up to 25% of the issue (up to $18.24 million).