The Inter-American Development Bank today announced the approval of $59.8 million in financing to IGC/ERI Pan Am Thermal Generating Limited to support the development, ownership, and operation of a power project developed under Panama’s new regulatory framework.
The resources will provide take-out financing to replace short-term bridge financing and to cover a portion of sponsor’s equity to reduce costs.
The project is the first approved for Panama by the IDB’s Private Sector Department. It will be regulated by a 1997 law that promotes private sector investment in the country’s electric power sector.
The 96 megawatt plant, whose total cost is around $92 million, is powered by six Wartsila fuel oil generators and is located in the district of La Chorrera, approximately 35 kilometers southwest of Panama City.
Pan Am Thermal Generating (PATG) is a special purpose project company sponsored by the Illinova Generating Company and ERI Investments of the United States. PATG has a five-year power purchase agreement with Empresa de Distribución Eléctrica Metro Oeste, the country’s largest privatized distribution company, controlled by Unión Fenosa of Spain.
The IDB financing consists of a $20.3 million loan from the Bank´s ordinary capital and a syndicated loan of $39.5 million with funds provided by financial institutions under subscription of participation agreements with the IDB.