Narrative
Full Description
Project narrative
On December 26, 2017, Canada's Brookfield Asset Management (BAM) announced its intention to sell a 27.7% equity stake in Transelec S.A. — Chile's leading power transmission company — to China Southern Power Grid International (CSGI) for $1.3 billion. Then, on March 15, 2018, BAM sold its 27.7% equity stake in Transelec S.A. to China Southern Power Grid International (CSGI). On December 21, 2018, Transelec Concesiones S.A. — a special purpose vehicle and joint venture of Transelec Holding Rentas Limitada and Rentas Eléctricas I Limitada — signed a $342 million syndicated loan agreement for multiple electricity projects: (i) construction of the Nueva Charrúa substation and the new 2x220kV Nueva Charrúa-Charrúa electricity transmission line, (ii) construction of the Nueva Porto Montt substation and the Pichirropulli-Nueva Puerto Montt transmission line, and (iii) construction of the 2x500kV Charrúa-Ancoa electricity transmission lines 1 and 2 (including the Los Changos-Nuevo Crucero Encuentro transmission line, the Los Changos-Kapatur transmission line, the Los Changos 1 substation, and the Los Changos 2 substation). The initial participants in the loan syndicate included Bank of Tokyo-Mitsubishi UFJ (MUFG), KfW IPEX-Bank (KfW). Export Development Canada (EDC). However, in January 2020, Bank of China purchased part of MUFG's stake. The loan carried an all-in nominal interest rate of 7.473% (6-month SOFR plus an unspecified margin) and a maturity of 18 years year (December 15, 2036). Loan disbursements amounted to $199.5 million by December 31, 2020 and $318 million by December 31, 2022. The loan’s (principal) amount outstanding was $299,306,000 as of December 31, 2022 and $315,913,000 as of December 31, 2023. Siemens was responsible for supplying the main construction and operating components of the project. The Spanish company Abengoa and the French engineering company Engie were also involved in project implementation. The Los Changos-Kapatur transmission line went into operation on November 2017. The rest of the project facilities went into operation in December 2019.
Staff comments
1. Transelec S.A. is Chile's leading power transmission company, supplying electricity to 98% of the country's population. It is owned -- through ETC Transmission Holdings S.L., Rentas Eléctricas I Limitada, and Transelec Holdings Rentas Limitada -- by a consortium that consists of China Southern Power Grid International (CSGI) and the Canadian funds Canadian Pension Plan Investment Board (CPP), British Columbia Investment Management Corp. (BCI), and Public Sector Pension Investment Board (PSP). 2. The precise size of Bank of China’s contribution to the syndicate is unknown. For the time being, AidData assumes equal contributions ($85,500,000) across the four members of the syndicate. This issue warrants further investigation. 3. Some sources suggest that the original face value of the loan was $358 million rather than $342 million. This issue warrants further investigation. 4. The loan identification number is 76.524.463-3