PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA PPP – Private Initiative Public Private Partnership INVESTMENT ALTERNATIVES IN GOODS AND SERVICES PROJECTS REQUIRED BY THE COLOMBIAN STATE

¿What is a private initiative public private partnership? o Is the possibility that a private party has to present before a public entity a solution to a specific need, through goods and/or services offering. o The financial structure must be presented by the private party, it can or cannot include equity contribution form the public entity. o The project initiative comes form a private party. The project presentation before the entity and it cost, are at its own cost, expenses and risk. o The public private partnership value must be at least of minimum wages. (USD$1’ approx.) o The shelf-life of public private partnerships may change depending on the project requirements. Its maximum duration time is 30 years. PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

Public private partnership stages 1. The private party identifies and establishes a public entity need. 2. The private party structures the project at its own costs and risks. 3. The private party files the project before the public entity for its pre-feasibility study. 4. Pre-feasibility stage: the public entity makes a first analysis of the project. 5. The public entity approves the project in pre-feasibility stage. 6. The private party files the project for feasibility stage. 7. Feasibility stage: the public entity makes a second analysis of the project. 8. The public entity approves the project in feasibility stage. 9. Project allocation proceeding. The proceeding may change depending if the public entity makes or not an equity contribution to the project. If the entity makes an equity contribution The contract allocates through a public tender proceeding. If the entity dose not make any equity contribution to the project The public entity publishes the project. If there is any interested third party in developing the project, there will be an abbreviated selection proceeding. In other case, the entity will allocate the project directly. 10. Project allocation to the private party. PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

Public private partnership stages In pre-feasibility and feasibility stages, the private party must prepare the following documents and studies: ◦A complete project description which includes information regarding: ◦Project construction. ◦Project operation. ◦Project maintenance. ◦Project organization and operating profit. ◦Project scope. ◦Demand studies. ◦Costs studies. ◦Financial sources. ◦Project detail financial model. ◦Detail description of the project stages and its duration. ◦Environmental impact, economical and social studies. ◦Technical feasibility studies. ◦A draft of the contract that is going to be executed, with a risk allocation proposal. ◦Include the entity observations and corrections made in the pre-feasibility stage. Pre-feasibilityfeasibility PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

Public private partnership advantages o Better risk management and allocation. o The possibility that the private party structures the project. o Different financial alternatives: o Corporate finance. o Project finance. o Governmental economic resources (no more than 20% of the project value) PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

Public private partnerships in Colombian context o Colombia, a country with positive macro-economic indicators. o Growing GDP. o Decreasing unemployment rate. o Increasing of direct foreign investment. o Low inflation rates. o Positive trade balance. o High legal certainty. o Low expropriation risk. o Low government default risk. PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

Public private partnerships in Colombian context o High Colombian State financial stability. o Low no payment risk: Credit rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings rated Colombia with investment-grade. This means that the Colombian State’s default risk is low. o External shocks control greater capacity. o High quality credit record. o Third parties’ greater confidence in The Colombian State. o Warranty conditions securing debt have improve. o New investment opportunities as a consequence of the peace process. o New opportunities to present solutions for national, departmental or municipal entities’ needs. o Project implementations to execute the peace process. PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA

What does HB Corp offers? o HB Corp is dedicated to offer counsel and representation to a wide variety of clients. We meet our clients needs through planning, structuring and implementing private initiative public private partnership projects. PHONE (571) | ADDRESS: KILOMETRO 4 VÍA LA CALERA (ANTIGUO MASSAI) ZIP CODE | | BOGOTÁ D.C., COLOMBIA