Informe De Gestión
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MANAGEMENT REPORT 2019 Confidential i Board of Directors Luisa Fernanda Lafaurie Carolina España Orlandi Juan Alberto Londoño Martínez Germán Quintero Rojas Rodrigo Galarza Naranjo Luis Fernando Perdigón Mauricio Cabrera Galvis Julio Andrés Torres García ii Table of Contents MESSAGE FROM THE PRESIDENCY ...................................................................................................... 1 1. FDN, THE DEVELOPMENT BANK THAT PROMOTES INFRASTRUCTURE ....................................... 3 1.1. Impact and sustainability ....................................................................................................... 11 1.1.1. Sectors ............................................................................................................................. 11 1.2. Promotion of infrastructure standards .................................................................................. 19 1.2.1. Commission of Experts and Intersectoral Commission on Transportation Infrastructure ................................................................................................................................................... 19 1.2.2. Interinstitutional agreements and international alliances .............................................. 20 1.2.3 Standards and methodologies ......................................................................................... 21 1.3. National and international recognition of FDN ...................................................................... 21 2. GOVERNMENT STRUCTURE ........................................................................................................... 23 3. FINANCIAL EVOLUTION OF FDN .................................................................................................... 29 4. BUSINESS ARCHITECTURE ............................................................................................................. 33 4.1. Business Process ..................................................................................................................... 33 4.2. Human Talent ......................................................................................................................... 35 4.3. Information Technologies ...................................................................................................... 40 5. EXCELLENCE IN RISK MANAGEMENT ............................................................................................ 43 5.1. Risk Management System ...................................................................................................... 43 5.2. Integrity, Transparency and Compliance ............................................................................... 51 5.3. Internal Control System (SCI) ................................................................................................. 52 6. REGULATORY ASPECTS .................................................................................................................. 53 6.1. Operations with partners and managers ............................................................................... 53 6.2. Judicial contingencies and impact .......................................................................................... 55 6.3. Anti-corruption and citizen service plan ................................................................................ 60 6.4. Document management ........................................................................................................ 60 6.5. Compliance with intellectual property and copyright regulations ........................................ 62 6.6. Certifications .......................................................................................................................... 62 6.7. Free circulation of invoices .................................................................................................... 62 6.8. Coexistence Committee ......................................................................................................... 62 6.9. Supply chain ........................................................................................................................... 62 6.10. Subsequent events ............................................................................................................... 63 ANEXOS ............................................................................................................................................. 63 iii Anexo 1. Indicadores corporativos 2019 .......................................... ¡Error! Marcador no definido. Anexo 2. Detalle proyectos de estructuración en el subsector transporte ..... ¡Error! Marcador no definido. Annex 3. Detail of former FEN projects in execution .................................................................... 72 Annex 4. Inter-institutional agreements in force signed in years prior to 2019 ........................... 74 Anexo 5. Metodologías para preparación de proyectos .................. ¡Error! Marcador no definido. Anexo 6. Comités internos ............................................................... ¡Error! Marcador no definido. Anexo 7. Categorías generacionales ................................................ ¡Error! Marcador no definido. Anexo 8. Informe anual de gobierno corporativo FDN 2019 ........... ¡Error! Marcador no definido. Anexo 9. ART. 446 del código de comercio ...................................... ¡Error! Marcador no definido. Anexo 10. Atención de PQRS............................................................ ¡Error! Marcador no definido. Índice de Tablas .................................................................................... ¡Error! Marcador no definido. Índice de Gráficos ................................................................................. ¡Error! Marcador no definido. We thank all the employees who were part of the preparation of the 2019 Management Report iv MESSAGE FROM THE PRESIDENCY 2019 was a year of great opportunity and impact for FDN. From an internal perspective, in 2019 we began to migrate towards an income structure more in line with our corporate purpose: interest as the main source of income, which we will consolidate in 2020. In 2019 we almost doubled the total portfolio we had as of December 2018, reaching $2.35 trillion; and in parallel, we prepaid $2.67 trillion corresponding to ordinary bonds issued in 2017, which constituted the majority of our treasury investments. This return was motivated by the decrease in past, present and future projects due to the repercussions of the corruption scandal at the Odebrecht construction company, the ruling of the arbitration court for the Ruta del Sol II project and the fiscal restrictions that make it difficult for the government to launch large infrastructure programs. All of the above forces us to make an evaluation of our business strategy, including, among others, methods of financing, the way of building our project pipeline or the emphasis on each of our business lines. On the other hand, in order to find our path, we start from the conviction that the liquidity of the projects and companies in the infrastructure sector are a very valuable asset for the development of the country. In my opinion, liquidity, understood as the possibility of investing knowing that there is a market where investments can be easily traded, is the best way to attract world-class investors. Creating new products that invite more and more sectors, projects and investors is how we at FDN work constantly to make our market more liquid every day. Restrictions on access to capital have always been the main causes of countries' infrastructure deficits. Our 1991 Political Constitution allowed us to break this cycle. The development of the electricity, communications, road and port sectors, etc., has come hand in hand with the engaging of private capital and progress in the way this type of opportunities is financed in the world. We have already reaped the rewards and have a good base of world-class investors. Colombia has been doing well and the world political and economic situation has made investors and financiers of the world consider us as an option for their businesses. I would like to make special mention of the recent entry of portfolio investors into the road sector as a foothold for more investments in Colombia. The possibility of having access to capital at the service of our country's development is an opportunity that we must embrace and face with enthusiasm, optimism and professionalism. Structuring! We know that for projects to be financeable it is necessary to have a first-class structuring. We are also convinced that structuring is a discipline that can be replicated in all infrastructure sectors. Our mission then is to make our knowledge available to central and local governments for an ideal development of our infrastructure that contributes to the competitiveness of the country and to reduce the gaps. In this report you will be surprised by the wide range of sectors where, and the ways in which, FDN has participated: from highways to mass transportation, including the Bogotá metro; from renewable energy to advice on engaging new capital to energy distribution on the Caribbean coast; from senior debt to bond issues for non-traditional investors; from hospitals to schools, including urban renewal projects; from advice to direct investment; from supporting the infrastructure 1 experts committee to participating in best practices in project preparation;