Mexico’s wind energy market is potentially lucrative. But a lack of government commitment and insufficient transmission capacity could stall its development.
Category: Project & Infrastructure Finance
Posted inDaily Brief
Cifi Visits Investors
Corporacion Interamericana para el Financiamiento de Infraestructura, (Cifi) is meeting fixed income investors this week. The Panama-incorporated, Washington-based lender is visiting US, Europe and LatAm buyers on a “non-deal” basis this week and next week through Tuesday, according to bankers managing the process. Bank of America Merrill Lynch and Standard Chartered are managing. The bank, which lends to infrastructure projects in the region, has yet to issue a cross-border bond, according to Dealogic. Cifi is owned by a group of multilateral and private banks, including HSBC, Caja Madrid, La Caixa, Itau, IFC, Caribbean Development Bank and Cabei.
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Jamaica Highway Gets Financing
Jamaica-based toll road operator Transjamaican Highway Limited (THL) has obtained a $285m 18-year financing package from a syndicate made up of the European Investment Bank (EIB), the IDB, the IFC, and Proparco. Of the total amount, the EIB is putting up 27%, the IDB 27%, the IFC 27% and Proparco 19%, according to US-based Astris Finance. Astris acted as exclusive financial advisor to THL. Proceeds will be used to refinance a bond issued in 2001 to finance the first phase of construction of the Highway 2000 toll road and to finance a 10-km expansion of the road.
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Project Finance Loans Miss Expectations
Structured finance bankers say that while they had expected infrastructure projects to require project finance loans this year, no new loans are close to being launched. The dearth of proposals has bankers worried the project finance market could be heading into a dry period in the next few months. “The last 2 months provide a very gloomy forecast as there is some pitching going on, but nothing else in the project finance space,” says one syndicated loans banker, who adds that even activity in the corporate loans space is spotty. Vale has appointed bookrunners for a $3bn syndicated loan, while America Movil is looking at proposals for a $4bn loan and Gerdau has put out an RFP for a $1bn loan. “A lot of corporates are well financed, so there are not many deals, and any deals that do come to the market will be able to price tightly as there is not much volume and banks are hungry to use their balance sheet,” says one head of syndicated loans. Market participants add that while some banks will look to lead deals, despite tight pricing, it will be very difficult for banks to participate at a retail level, particularly for European banks seeing higher costs as a result of the sovereign debt crisis. The last project finance loan, a $250m A/B loan from the IFC to fund the 168MW Cheves hydropower plant in Peru, came in December.
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Ecopetrol Picks Pipe Partners
Ecopetrol has picked equity partners to join a consortium to build the $4.2bn Oleoducto Bicentenario oil pipeline, it says. Ecopetrol will contribute 55% of the equity portion of the project, with the remaining 45% ($139.5m) equity participation coming from the partners. Pacific Rubiales (32.9%) and Petrominerales (9.7%) are taking the largest positions. Hocol, Rancho Hermoso-Canacol, Grupo C&C and Vetra each took stakes of less than 1%. The partners should also contribute $700m to fund construction of the project’s first phase, Ecopetrol says. The project will also require an undetermined debt component, of which Ecopetrol has said it would seek a portion in Colombia’s domestic markets.
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Nicaragua Wind Project Signs Loan
The Amayo II wind project has closed on a $45m 15-year non-recourse project financing from FMO and Cabei. The facility consists of a $42m senior loan and a $3m mezzanine loan. Senior loan participants include Cabei, FMO, EKF and BIO. The borrower is Consorcio Eolico Amayo (Fase II), a subsidiary of AEI, Centrans Energy Services and Energia Eolica de Nicaragua. The wind project consists of 11 wind turbines capable of producing 23.1 MW of electricity. Output is fully contracted under long-term, 15-year PPAs with local power distribution companies Dissur and Disnorte.