Bank of China (Luxembourg) Stockholm Branch contributes to $140 million syndicated loan for Buenaventura Port Construction PPP Refinancing Project (Linked to Record ID#98770)

Project narrative

In August 2010, Sociedad Portuaria Terminal De Contenedores De Buenaventura (TCBuen) — a special purpose vehicle and joint venture — signed a $157 million financing package with a group of banks for Phase 1 of the Port of Buenaventura Development Project. The financing package consisted of a 13-year A loan from the World Bank's International Finance Corporation (IFC), a 13-year B loan from Costa Rica's regional infrastructure financing corporation CIFI, and two 10-year loans from banks Banco Espirito Santo and WestLB. IFC and the Central American Mezzanine Infrastructure Fund (CAMIF) also provided a joint 10.5-year C loan. The first phase of the $224 million project involved the construction of a new international container terminal — including a 440 meter berth, two ship-to-shore gantry cranes, seven rubber-tired gantry cranes (RTGs) and ancillary facilities — in the Port City of Buenaventura at the Aguacate Marsh before the Cascajal Island. The container terminal is located in Buenaventura’s urban area, 2.4 kilometers away from the existing terminal of Sociedad Portuaria Regional de Buenaventura. Upon completion, the terminal was expected to provide approximately 268,000 twenty foot equivalent units (“TEUs”) in operational capacity and only handle containers. Then, in 2014, TCBuen secured a second financing package for the second phase of the project. The total cost of Phase 2 was $157.9 million and it was financed in part with a $25 million A loan from the IFC and a $65 million B loan from a syndicate of banks. The purpose of Phase 2 was to expand and modernize the Port of Buenaventura and increase its capacity to 610,000 TEUs. Then, in 2018, TCBuen signed a $140 million syndicated secured term loan facility agreement with four banks — Banco Santander, SA; Bank of China (Luxembourg) SA Stockholm Branch; Industrial and Commercial Bank of China Limited Seoul Branch; and Banco Sabadell SA, Miami Branch — to refinance its existing debts from the project’s construction phase (Phase 1). AidData estimates that BOC contributed $35,000,000 (captured via Record ID#54629) and ICBC also contributed $35,000,000 (captured via Record ID#98770) to this syndicated loan. Construction of the container terminal began in August 2008. Maritime operations began on January 27, 2011. The expansion of the terminal began in 2014. This project has been a subject of local controversy. On December 10, 2009, a local coalition of community councils – Proceso de Comunidades Negras - Regional Palenque El Congal1 (“PCN”) – requested the assistance of the Office of the Compliance Advisor/Ombudsman (CAO) on behalf of community members in Buenaventura to address alleged impacts on vulnerable afro-Colombian communities of the Malecón Project. When the CAO pointed out that the Malecón Project was a Governmental Initiative not funded by IFC and had no apparent link with the IFC-funded private sector TCBuen Project in a different area of Buenaventura, the PCN, together with Fundación Huellas y Rostros del Sentir Humano “Garífuna”, submitted a second version of the complaint describing impacts of TCBuen on its neighboring communities. Signatories raise concerns about ensuring proper consultations with ethnic minorities such as themselves, ensuring community participation in decision-making, protecting their cultural and social ways of life, and guaranteeing access to project information.