Category: Structured Finance

The IDB is supporting a $2.8bn Brazilian power project with more than $500m in A and B loans. It will provide a $147m A loan to Porto do Pecem Geracao de Energia and a $50m A loan to UTE Porto do Itaqui Geracao de Energia. Pecem is led by a consortium headed by Energias do Brasil and MPX Energia, while Itaqui is led by MPX. The IDB says it will also arrange up to $314m in B loans from several international banks. It adds that the BNDES is expected to contribute up to approximately $1.5bn in local currency as part of the financing package. Pecem I and Itaqui will add 720MW and 360MW, respectively, to the national grid by 2012 and are part of the Brazilian government’s growth acceleration program, or PAC.

Central American development bank Cabei has sold COP250bn ($107m) in bonds locally in Colombia, says Cabei treasury head Felix Magana. The bank, which has also recently issued in Costa Rica and Taiwan, priced COP150bn in 5-year bonds at par to yield 9.99% and COP100bn in 10-year bonds at 10.69%. The issue was 3.5x subscribed, Magana says, and is the first from a COP500bn program. Citi managed the transaction.

The IDB is extending a $1bn 20-year loan to BNDES, the borrower says. BNDES will use the funds to provide long-term credit to micro, small and midsized businesses in Brazil and is expected to target some 25,000 companies. The loan has a 4-year grace period. The banks did not disclose the rate.

The IDB has approved a $100m policy-based loan so Panama can consolidate reforms needed to ensure the sustainability of its energy supplies and reduce poverty. The loan is for a 20-year term with a 5-year grace period, and carries a Libor-based rate. The loan – the first in a series of 3 facilities planned for Panama’s energy sector – is from the IDB’s ordinary capital.

CAF has approved a $100m loan to Ecuador. The facility is a revolving credit line via Corporacion Financiera Nacional, an autonomous Ecuadorian financial institution. CAF executive president Enrique Garcia says such facilities are made available to shareholders to mitigate downside from the crisis. Funds will be channeled to Ecuador’s national development plan, he adds.

CAF has approved a $270m loan to Colombia to renovate a tunnel connecting Bogota to Buenaventura. The loan has a 14-year amortization period and a grace period of four years. A spokeswoman declines to comment on the rate. The local Instituto Nacional de Vias will develop the project, whose total cost is around $400m, according to CAF. The multilateral provided an initial $30m loan to the tunnel.

Remittances to LatAm and Caribbean countries are poised to see the first annual drop in a decade, says the IDB. “The break in the upward trend took place after the first semester of 2008. After a flat third quarter, in the fourth quarter remittances dropped to $17bn, 2% less than in the same period of 2007,” adds the multilateral. “For the few countries that have reported data for January, totals were down by as much as 13%,” it adds. Last year expatriates transferred some $69.2bn to their homelands, 0.9% more than in 2007, according to the IDB’s Multilateral Investment Fund, which adds that it is still too early to tell how much remittances could decline this year. The IDB says that in January alone, some countries reported remittances were down by as much as 13%. El Salvador’s remittances, for example, plummeted 11.9% in January, according to the government. They totaled $22.3bn in 2008. Mexico’s remittances, which total about $25.1bn, also dropped 11.9% in January, says Morgan Stanley. A decline in remittances is trouble for many countries that are heavily dependent on them to grow. For instance, based on government information, about 27% of Haiti’s GDP comes from remittances, as does 19.6% of Honduras’, 17.0% of El Salvador’s, and about 15% of Jamaica’s and Nicaragua’s.