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Overview

ICBC contributes to $300 million A/B loan with CAF to Pan American Energy for green energy and energy security capital expenditures

Commitments (Constant USD, 2023)$54,000,000
Commitment Year•2023Country of Activity•ArgentinaDirect Recipient Country of Incorporation•ArgentinaOverseas Jurisdiction•PanamaSector•EnergyFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 18, 2023
Start (actual)
Feb 16, 2024
First repayment (originally scheduled)
May 17, 2025
Last repayment (originally scheduled)
May 16, 2029

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Intergovernmental Organizations

  • Andean Development Corporation (CAF) Development Bank of Latin America

Private Sector

  • Banco Santander, S.A. (Santander Group) (formerly Banco Santander Central Hispano, S.A.)
  • Cargill Financial Services

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • Pan American Energy

Guarantors

Private Sector

  • Pan American Energy

Loan description

BOC and ICBC contributions to Tranche B of USD 300 million A/B loan to Pan American Energy Argentina Branch for green energy and energy security capital expenditures in 2023

Grace period•2 yearsInterest type•Variable Interest RateMaturity•6 years

Narrative

Full Description

Project narrative

On May 18, 2023, the Development Bank of Latin America and the Caribbean (Corporación Andina de Fomento, CAF) signed a $300 million A/B loan agreement with Pan American Energy, Argentina Branch (PAE Argentina). Then, also on May 18, 2023, the following banks signed a participation agreement to join the $270 million B tranche of the loan: Banco Santander SA, Cargill, Cargill Financial Services International (CFSIT), Industrial and Commercial Bank of China (Panama Branch), and Bank of China (Panama Branch). CAF was the sole contributor to the $30 million A tranche. Payments on the loan were to be made in semiannual installments beginning in 2025, and the final maturity was to be in 2029, indicating an approximately 2 year grace period and 6 year maturity period. The loan also carried a variable interest rate of SOFR plus an unspecified margin. Pan American Energy also provided a corporate guarantee. The first disbursement of $75 million was made on February 16, 2024. The loan had previously been approved by the CAF's Board of Directors on or about December 6, 2022. The loan proceeds were to be used by PAE to finance capital expenditures (capex) related to (1) facilitating transition to more "green projects", (2) increasing gas and oil production levels, and (3) improving access to financing for SME's in PAE's supply chain.

Staff comments

1.Under an A/B loan such as this, one entity is the lender of record for the entire A and B loan portions (in this case $300 million from CAF). The lender of record then partners with other institutions who provide the B portion (in this case, the $270 million from ICBC, Bank of China, and other co-financiers). 2. The precise contribution by ICBC to the B tranche of the loan is unknown. For the time being, AidData assumes that all five banks participating in the $270 million B tranche contributed equally ($54 million). Cargill and CFSIT are counted as two separate contributors, insofar as they are listed separately in CAF's records. 3. Pan American Energy is 50% owned by British Petroleum and 50% owned by Bridas Corporation. Bridas Corporation, in turn, is 50% owned by Bridas Energy Holdings (a private Argentine company) and 50% owned by China National Offshore Oil Corporation (CNOOC).