A joint venture led by Invenergy has signed an up-to-$350 million loan from the Overseas Private Investment Corp. for the construction of an LNG terminal and generation facility in El Salvador.
The financing will fund the construction of the 378 MW Energía del Pacífico project in the port of Acajutla, Sonsonate, which represents a total investment of around $800 million.
The project will be El Salvador’s largest thermal power plant, increasing the country’s generation capacity by 23%, and will help reduce the country's dependence on diesel and heavy fuel oil while meeting growing demand.
The International Finance Corp. is providing a further $195 million debt package comprising a $100 million A loan, up to $65 million from the development bank's co-lending portfolio program and a $30 million credit guarantee.
The IFC is also expected to act as a lead arranger in the mobilization of additional funding from other institutions to complete the financing plan, and is considering providing an interest rate swap for the senior debt. The target debt-to-equity ratio for the project is 70:30.
The Energía del Pacífico project is 85% owned by a consortium of investors called Invenergy Clean Power El Salvador and 15% by developer Quantum Energy.
Invenergy Clean Power is the largest investor in Invenergy Clean Power El Salvador, with a 76.5% stake held through various subsidiaries, while 17.6% is owned by supermarket chain owner Calleja and 5.9% by VC Energy de Centro America.
The Energía del Pacífico LNG import terminal includes a floating storage regasification unit (FSRU) and a combination of subsea and underground natural gas pipelines. The project will also feature a 27 mile transmission line connecting the gas-fired generation project to a substation.
The project has a 24-year lease agreement with the Executive Commission of the Port of Acajutla which owns and manages the port. It was awarded a 20-year power purchase agreement with the government of El Salvador in a tender held in 2013.
Wärtsilä is the project's engineering, procurement and construction contractor. Norton Rose Fulbright and Romero Pineda Asociados are New York and local counsel, respectively.
Sargent & Lundy Consulting is the lenders’ engineer, INDECS Consulting is insurance consultant and PSR-INC Energy Consulting is acting as market consultant.
(A version of this story first appeared on IJGlobal).