Infrastructure in Colombia and Chinese Investment

In recent years, particularly since the conclusion of the Peace negotiations with the FARC guerilla in Cuba, the People’s Republic of China has become increasingly interested in investing in Colombia’s natural resources and infrastructure. More than just oil and natural gas, the Chinese government and its state companies have also shown interest is agriculture, roads, and major ports on the Pacific coastline. One such project is the Buenaventura Port Industrial Park, which would be located in Colombia’s most important commercial port. Back in 2015, the Colombian and Chinese governments signed a memorandum of understanding stating that they would explore development and financing options for this project. Since then, several designs and proposals have been put forward, but the construction itself is yet to start. When it becomes a reality, the Buenaventura Port Industrial Park, which also serves as one of South America’s main ports for commerce with Asia, will feature advanced logistics and technology processing for cargo as well as areas for energy resource processing and shipment. Similarly, the project is expected to include connections with new train and rail systems as well as commercial areas for the sale of products in bulk. Even though the project seems to be on hold while details are finalized, the initial investment by Chinese entities is expected to be US$16 million and matched by Colombian government agencies.

Infrastructure in Colombia and Chinese Investment

Another region of interest to the Chinese government and its companies is the Orinoco river basin or the eastern plains, which run through both Venezuela and Colombia. This natural area is rich in water and mineral resources as well as particularly fertile for agricultural and cattle operations. China, as well as other Asian nations, seem to be interested in managing agribusiness operations in this region, whose production they can then import directly into their national markets, given that domestic production of certain goods is not feasible or is insufficient. In this regard, China originally proposed the construction of a rail line that would run from the Colombian Orinoco basin and eastern plains all the way to the Buenaventura port on the Pacific coast. However, this proposal has since been abandoned given the technical difficulties that crossing through the entirety of the Andes mountain range would entail. Nevertheless, such a logistical and infrastructure endeavor could again be a possibility in the future, because it would imply skipping the Panama Canal passage for merchandise coming all the way from Venezuela and going directly to a port on South America’s Pacific coast.

In the meantime, both the Colombian and the Chinese governments have started exploring the possibility to spend some US$3 billion on agricultural projects in the Colombian Orinoco basin and eastern plains as well as upgrading the existing road and highway infrastructure that connects the region with the rest of the country, particularly with the ports along the Pacific coast. Lastly, Chinese state owned companies are also participating as contractors in the Colombian government’s massive effort to create a Fourth Generation national highway system.

(Read more about China’s Foreign Direct Investment in Colombia)