Investment in infrastructure three pillars of city resilience

Tax Increment Financing (TIF): Sampled Project
INVESTMENT IN INFRASTRUCTURE
Project Description
Value Capture Component
Creating the first TIF in Latin America in Medellin, Colombia
Since 2011 the World Bank has provided technical advice to the Government of Colombia to support cities to structure & take to market innovative land-based financial instruments that would leverage private finance for urban infrastructure.
The initiative thus far has focused on ascertaining the legal and financial feasibility of implementing a TIF operation of a major urban renovation project in Medellin called the Innovation District
Preliminary results showed that the Innovation District would potentially benefit from use of TIF to fund catalytic public infrastructure
The proposed urban development plan includes redevelopment of 184 hectares comprising four neighborhoods in downtown Medellin, targeting to develop 1.6m m2 over a 12 year period, including 60,000 m2 of social housing
Legal feasibility analysis showed that Colombian legislation indirectly limits the use of incremental revenues by restricting local administrations to securitize future revenues beyond their government periods (four years). With the support of the Bank, the City of Medellin is currently in the process of developing the overall regulatory framework to legally enable the use of TIF at the city level
If the project meets expectations (1.6 million m2), cash-flow analyses showed that the project has the potential to increase tax revenue from the area by over 400% in peak years, which could potentially collect about US$45m in revenue bonds, which would enable the city to fund 25% of projected up-front infrastructure requirements.
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