IDF GRANT FOR ASSET MANAGEMENT The backbone of the public sector reform process taking place in Colombia, Programa de Renovacion de la Administracion Publica (PRAP), led by the National Planning Department (DNP) encompasses crosssector issues of public administration, including asset management. The Fiscal and Institutional Adjustment Loan Program financed by the IBRD supports the PRAP and its two main objectives are: First, to promote reforms addressing fiscal rigidities necessary to attain the substantial fiscal adjustment underlying sustainable macroeconomic stability; and second, to improve the provision of public services and establish the institutional basis for higher efficiency and accountability in public expenditure. The state has accumulated over decades a significant amount of unproductive assets that bear a burden on the public expenditure budget. The Grant will be focused on supporting the development of an efficient public asset management system. This system will be based on the development of an asset information system, a management team (in house and training throughout public entities), and the design and implementation of legal and accounting procedures to expedite resulting transactions e.g. sale, rental, lease operations, contribution to public investment in social programs, and transfer between public entities. The asset management information system will be based initially on the results from an inventory plan of public real estate at the national public entity level, and then it will incorporate other asset classes and public entities (e.g. regional public entities). This new system will take advantage of the existing governmental information systems, in particular SIlF, which is responsible for the government's financial management information. The asset management information system will help increase reliability of SHF information, contributing to the accuracy of the financial information of the public sector. At the same time, this system will be developed in coordination with the Office of the Comptroller General in order to establish synergies with its information systems. In parallel to the development of such information system, the Asset Management Program (PROGA) will necessarily have to normalize and prepare the assets for transactions legally, accounting, and valuation. The information system and the normalization of the assets is essential for the PROGA to have any meaningful impact, given that management decisions must be based on reliable and complete information. Thus, the PROGA needs to subcontract the completion of an inventory plan, the design and development of the information system, the normalization and valuation of public real estate assets owned by national public entities. In a second stage, the PROGA will need to carry out the same tasks for other public asset classes (e.g. vehicles, plants and equipment, financial paper, etc), and incorporate regional public entities within the program. dditionally, the program needs to set up a asset management team Central Management Unit (UCG) that will be in charge of managing the information system, leading the normalization process together with the entities, developing asset management training programs for key public employees, completing the legal and accounting reforms needed to facilitate transactions, formulating specific asset management recommendations to the (or his delegate), and lead the transactions resulting from such recommendations. Therefore, UCG will need to be led by highly qualified professionals in real estate, asset management, in the normalization process, among others. The PROGA needs to hire expert consultants in the field, both at the national and international level to help design in detail and start up the UCG. The UCG also has to conduct an extensive diagnostic of the existing legal framework and design and structure legal and normative changes, including the design of an incentive system. Such tasks also includes the elaboration of a procedures manual that takes into account the legal and accounting reforms conducted to expedite the transaction processes. This task will be outsourced with domestic consultants and international experts. Additionally, the UCG needs to structure financial and legal schemes to execute transactions resulting from asset management decisions. These include interactions with the market  rental, leasing, sales, swaps with regional entities, contributions to public investment social programs, and transfer among public entities: Social Impact: The PROGA will give priority to the identification of idle public real estate asset that can be transferred to its national social housing program as a subsidy contribution. The PROGA would work together with the Ministry of Housing and Environment in designing and developing a legal and financial scheme that will speed up the transformation process of an idle public real estate asset into a social housing project. This will contribute in meeting the government's targets in the reduction of the existing housing deficit (1,5 million units) using idle public assets. Funds are required to develop the legal and financial structure for this type of programs, and lower administrations costs. This case applies to other type of social programs such as land reform, primarily for victims of violence. Urban Renovation: The state has a large amount of non-productive assets which are required by the local municipalities and districts for urban renovation. If the nation is able to transfer the real estate assets to this type of programs; utility services, administration and tax savings will be significant. Real estate Leasing / Rents: The real estate market in Colombia is not well developed. Long term contracts do not exist. However, a new rental law will support the development of this market. There is an opportunity to create Special Purpose Vehicle (SPV) into which public real estate assets generating rentals can be packaged and sold in the capital markets, one alternative being real estate funds / trusts (securitization). Support in the development of such schemes is needed to generate value to public assets and speed up the sale of assets. Sales: The existing legal framework limits the selling process of public assets. The PROGA needs to develop innovative outsource schemes that will allow to implement commercial strategies to dispose their assets. This includes facilitating the contribution of idle public property to private real estate projects, as a means to speed up sale and generate value in the process. This schemes have proven successful in social housing programs at the municipal level (Metrovivienda) and could be adapted to serve the PROGA's objective. Funds are required to develop such schemes.