Colombia Opens US$312 Million Quake Fund After 2 Months
COLOMBIA · ECONOMY
Key Facts
- —The country Colombia, a South American nation of over 50 million people, is a close US ally and coffee and oil exporter.
- —The background A magnitude 7.4 earthquake struck western Colombia on 10 August, killing 331 people by the official count a month later.
- —Why now The reconstruction fund was created by decree on 9 September, but the president admits red tape delayed its start.
- —What happened On Tuesday, 6 October, the government said Fondo Milagro could spend COP 1 trillion (about US$312 million) from 7 October.
- —The numbers Rebuilding is estimated at over COP 30 trillion (about US$9.3 billion), roughly 30 times the first payment.
- —What it means for you The bill lands as Colombia turns to the Washington-based IMF for support, a test for its bonds.
- —Still open It is unclear how fast money will reach families and where the remaining billions will come from.
Eight weeks after a magnitude 7.4 earthquake, Colombia’s reconstruction fund is finally ready to spend.
Colombia’s earthquake reconstruction fund, the Fondo Milagro, starts paying out on Wednesday, 7 October, with COP 1 trillion (about US$312 million). President Abelardo de la Espriella confirmed on Tuesday in Pereira that the fund was ready.
The money is a first step against a bill estimated at more than COP 30 trillion (about US$9.3 billion). It comes as the government seeks help from the International Monetary Fund to steady strained public finances.
How the Fondo Milagro Will Work
The fund was created by Legislative Decree 1379 of 9 September, issued under a declared economic, social and ecological emergency. It pays for humanitarian aid, rehabilitation, reconstruction, economic revival and risk reduction.
The Finance Ministry set it up as a separate trust under a commercial trust contract, the business paper Portafolio reported. Payments go through the national Treasury, with an independent audit and oversight by the Comptroller General.
“Since yesterday the Fondo Milagro trust has been constituted,” Vice President José Manuel Restrepo said on Tuesday. “From tomorrow it starts to dispose of resources.”
An initial work plan covers COP 627 billion (about US$195 million). The government plans a further COP 2.7 trillion (about US$840 million) in November.
That would bring the fund to about COP 4 trillion (about US$1.25 billion) in its early stages.
Restrepo also announced a quota of COP 211 billion (about US$66 million) under “works for taxes”. That scheme lets companies settle part of their income tax by building public projects.
Two Months of Delays
De la Espriella, a conservative who took office on 7 August, blamed the delay on what he called the “paquidermia del Estado”. The phrase means the elephant-like sluggishness of the state.
The government also cited incomplete damage reports from municipalities, the Medellín daily El Colombiano reported. The president said he did not want a reconstruction “limited to replacing what was lost”.
He said the fund would be presented formally to his cabinet on Tuesday. Jaime Andrés Uribe Tamayo was named its manager in late August, according to El Colombiano.
The Scale of the Damage
The US Geological Survey recorded the quake at magnitude 7.4 at 7:34 a.m. local time on Monday, 10 August. Its epicentre lay 2 kilometres south-east of San José del Palmar, in Chocó province, about 108 kilometres deep.
The agency issued a red alert, its highest level for expected deaths and economic losses. A month later the official tally stood at 331 dead and 4,505 injured, Ecuador’s El Comercio reported.
The same count listed 36,326 homes destroyed and 202,002 damaged across 498 municipalities in 16 provinces. Risaralda, whose capital is Pereira, and Valle del Cauca were among the hardest hit.
What It Means for You
For investors, the rebuild adds to pressure on a budget already under strain. De la Espriella has told Finance Minister Miguel Gómez to negotiate with the IMF, the news site Cambio reported on 4 October.
A ministry delegation was due in Washington this month for talks, Cambio said. How much the government borrows for the quake will shape demand for Colombian bonds.
For travellers, Pereira is a gateway to Colombia’s coffee region, a UNESCO-listed cultural landscape. Visitors should check local conditions and building safety before travelling to the worst-hit areas.
For donors and aid groups, the fund’s audit and Comptroller oversight offer a channel to track how money is spent. Its first payments will show whether those controls work.
What Is Not Known
The government has not published a timeline for when families will receive housing aid. It is also unclear which projects the first COP 627 billion (about US$195 million) will fund.
The source of the remaining reconstruction money beyond about COP 4 trillion (about US$1.25 billion) has not been explained. Any IMF arrangement, its type and its size are also still unknown.
What Comes Next
The fund can start spending from Wednesday, 7 October, and the government plans the larger top-up in November. Watch for the first contracts and the IMF talks in Washington.
The launch does not mean reconstruction is funded. The first tranche covers roughly one thirtieth of the estimated bill, and no plan for the rest has been published.
Conversions use Colombia’s official exchange rate (TRM) of COP 3,209.78 per US dollar for 6 October 2026.
Frequently Asked Questions
What is the Fondo Milagro?
It is a government trust fund created in September to finance relief and reconstruction after the 10 August earthquake. Its name means Miracle Fund in Spanish.
How strong was the earthquake?
The US Geological Survey measured it at magnitude 7.4, centred in Chocó province at a depth of about 108 kilometres. A month later the official death toll was 331.
How much money does the fund have?
It starts with about US$312 million and expects about US$840 million more in November. Reconstruction is estimated at about US$9.3 billion.
Is it safe to visit the coffee region of Colombia?
The US State Department does not list the region among its Do Not Travel areas, but some towns suffered heavy damage. Check local advice before travelling.
Sources: US Geological Survey, event us6000tjl2; Superintendencia Financiera de Colombia, TRM series; Portafolio; El Colombiano; El Comercio; Cambio (all accessed 7 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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