ICBC contributes to $325 million syndicated loan tranche for La Plata Refinery and Lujan de Cuyo Refinery Expansion and Modernization Project

Project narrative

On July 28, 2023, YPF S.A. — a vertically integrated, majority state-owned Argentine energy company, engaged in oil and gas exploration and production, and the transportation, refining, and marketing of gas and petroleum products — signed a $375 million syndicated A/B loan agreement with Corporación Andina de Fomento (also known as CAF or the Development Bank of Latin America), Banco Santander, the Industrial and Commercial Bank of China Limited (Panama Branch), Cargill Financial Services International, Citigroup, Bank of China Limited (Grand Cayman Branch), and Banco Latinoamericano De Comercio Exterior. The loan consisted of two tranches: a $50 million tranche (Tranche A) financed by CAF with a final maturity date of July 28, 2030 and a $325 million tranche (Tranche B) financed by Banco Santander, the Industrial and Commercial Bank of China Limited (Panama Branch), Cargill Financial Services International, Citigroup, Bank of China Limited (Grand Cayman Branch), and Banco Latinoamericano De Comercio Exterior with a final maturity date of July 28, 2028. Bank of China Limited (Grand Cayman Branch) and the Industrial and Commercial Bank of China Limited (Panama Branch) both reportedly contributed $54.17 million to Tranche B. Both tranches fully disbursed on August 4, 2023. As a condition precedent to this disbursement, YPF S.A. canceled another international syndicated loan agreement signed in 2022 for $225 million plus accrued interest. The borrower is expected to use the proceeds of the loan to fund its New Fuel Specifications (NEC) project, which will seek to increase ultra-low sulfur fuel production at industrial complexes (refineries) in La Plata in the Buenos Aires province and Luján de Cuyo in the Mendoza province. The project involves constructing new units and retrofitting existing facilities to increase YPF's ultra-low sulfur fuel production from 24% to 71% of total fuels. The project is expected to drive technological change towards less polluting engines in accordance with sustainability protocols. When all enhancements are complete in 2026, YPF expects to produce 71 percent of total ultra-low sulfur fuels, a significant increase from its current 24 percent rate. This change is expected to generate lower emissions of sulfur dioxide and better air quality. The project is expected to generate more than 1,600 jobs during the construction period.