IDB Approves US$135mn Camisea Financing

The board of the Inter-American Development Bank (IDB) approved on Wednesday US$135mn in financing for the TGP transport consortium of Peru's Camisea natural gas project, the IDB said in a statement.

The IDB financing will consist of a US$75mn A loan from ordinary capital for a term of up to 14 years, and a US$60mn syndicated B loan consisting of resources from financial institutions with subscription of participation agreements with the IDB, for a term of up to 12 years. The interest rate on both loans will be "comparable to market rates for private sector borrowing," the statement said. "It's good news, we are very happy with the approval of this loan for the transport component of the project," TGP spokesperson Fernando Deustua told BNamericas. "With its support for the Camisea project, the IDB is supporting the sustainable development of a Latin American country taking into account the environment," he said. The IDB's decision comes just two days after the Andean Development Corporation (CAF) approved a US$75mn loan also for the transport component.

During their discussion of the project prior to the vote, several IDB directors expressed their satisfaction at a Peruvian government decision to create a sustainable development commission for Paracas Bay. Camisea's fractionation plant, being built by Argentine company Pluspetrol, will be located at Paracas, and the commission aims to leave the bay cleaner that it was before the project. The directors also welcomed a decision by IDB management to extend the bank's environmental monitoring and supervision to the upstream portion of the project, in addition to the downstream transportation component.

The US Export Import Bank (Ex-Im) recently voted against a US$214mn loan for the project due to environmental concerns, leaving a monitoring "vacuum" in the upstream part of the project. The project, which has been declared a 'national interest priority' by Peru, is expected to bring the country major economic benefits, lower the cost of energy and reduce air pollution by replacing other fuels with natural gas, the statement said. The TGP transport consortium is led by Argentina's Techint subsidiary Tecgas. The other members are Argentina's Pluspetrol, Algeria's Sonatrach, US-based Hunt Oil, South Korea's SK Cororation, Peru's Grana y Montero and Belgium's Tractebel.

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