Isagen Floats Ambitious Hydro RFP

Colombian power generator Isagen is seeking bank participation for a $1.3bn syndicated loan to help finance an 800MW hydroelectric project at the Sogamoso river complex in the northern central part of the country. The Medellin-based state-owned entity is looking to hire a financial advisor for the deal. In an RFP issued over a week ago, the company apparently asked lenders to consider committing to a 2-stage financing: an initial $600m corporate holdco loan to allow it to begin construction while debt markets remain expensive and choppy, and, some 2 years down the road, a second $700m non-recourse project financing. The company requested suggestions on fees for both deals, which some bankers have found peculiar, given the difficulty loan desks are having in pricing deals even in the short term. “Their timing isn’t particularly good,” says a banker whose shop was invited to pitch. “They’re looking for over $1bn at a time when everyone is closed for business,” he adds, noting Isagen extended the deadline for proposals until December 15. Isagen hired Bancolombia earlier this year to be local advisor on the deal, but the shop has apparently not been involved in the process to choose banks for the cross border loan. International lenders were asked to pitch directly to the company. Bancolombia bankers and Isagen officials did not return calls seeking comment.