The Cárcel Metropolitana para Sindicados of Medellín, Colombia’s first prison infrastructure project to be developed under a public-private partnership (PPP) scheme, recently reached financial close.

The sponsors of the project on 3 February closed a COP 215bn (USD 58.4m) financing package provided by two banks belonging to local corporation Grupo Aval- Banco de Occidente and Banco de Bogotá.

Grupo Aval confirmed its banks’ participation.

The prison PPP, which will add 1,339 beds and aims to ease pressure on police stations and short-term detention units (URIs), where overcrowding is extreme, is the first Colombian PPP project won by Mexican infrastructure developer Prodemex, which has been operating for several years in the Andean country as a construction company, according to Juan Márquez Vargas, the firm’s managing director. The company already operates prisons in Mexico and is eyeing three other social infrastructure and transportation projects in Colombia as new opportunities. “We want to expand and find ways to support the federal (national) government and the territories,” he said.  Prodemex will operate the jail through the SPV Carmet Medellín.

Prodemex’s Márquez Vargas declined to say how much his firm contributed in equity to the deal but noted that it sought a 30%-70% ratio of equity and debt.

Transformative for Colombian PPPs

In an interview with this publication, Andrea Ramírez Velandia, partner and chief commercial & innovation officer at Profit Banca de Inversión (Profit BI), said the project marks a transformative step for the justice and social infrastructure sector. Profit BI acted as co-financial advisor to Prodemex alongside AFI Asesoría Financiera en Infraestructura.

“This is not only Colombia’s first PPP of its kind; it is also a model of how infrastructure can directly impact human dignity. Profit has always focused on projects that have real social impact, and this one is no exception,” she told this publication.

“Prodemex is deeply experienced in hospital and penitentiary PPPs in Mexico, and they have been looking to expand regionally,” she added. “Their participation reinforces investor confidence in the Colombian market.”

Aval Banca de Inversión acted as the financial structurer for the lenders.

Technical, environmental, insurance, and financial due diligence was conducted respectively by Infrata, Marsh, and KPMG, Ramírez Velandia said.

None of the firms answered requests for comment.

Aval named Brigard Urrutia, which also did not respond to requests for comments, as legal advisor to the sponsors, while Martínez Quintero Mendoza González Laguado & De La Rosa confirmed it advised the lenders.

Project progress and operations

Márquez Vargas said that construction began in 2025 and the facility remains on track for completion in 2027. He said Prodemex paid for preconstruction until the first financing disbursement on 3 February this year.

David Morales, director at Profit BI, explained that the project operates under a “hybrid model” in which the private partner handles design, construction, and full maintenance, as well as non-penitentiary services such as food, laundry, and personal item provision while custodial and security functions remain under state control.

“In Colombia, by law, prison services cannot be provided by a private operator,” he said. “That’s what makes this a hybrid model. The private partner builds and maintains a facility with high operational standards, but the state retains all direct management of the incarcerated population.”

The project is rooted in a series of rulings dating to 1998 that declared Colombia’s prison system unconstitutional due to severe overcrowding and degrading conditions.

Morales noted that Medellín is among the regions most affected. “In Medellín, for every one space available, three people are held,” he said. “This infrastructure is urgently needed to provide humane conditions, proper food services, safe spaces, and access to programs that reduce recidivism.”

Colombia has additional prison PPP initiatives planned for Cauca, Antioquia, Santander, and Putumayo but those are still in the drawing board, according to a government official.

Ramírez Velandia said that the firm is now advising on other major social impact infrastructure, including school PPPs in Cusco in Peru and cable car transportation systems in Peru and El Salvador.