ICBC contributes $36.25 million to $104 million syndicated loan for El Corti Wind Farm Project

Project narrative

On September 27, 2017, the Industrial and Commercial Bank of China provided part of a syndicated loan worth $104 million to Greenwind S.A. — a special purpose vehicle and subsidiary of Pampa Energía S.A. — to construct the El Corti Wind Farm in Buenos Aires. Upon completion, the wind farm is expected to have a capacity of 100 MW. The project is being financed on a Public-Private-Partnership (PPP) basis and it has a debt-equity ratio of 59:41. The syndicate is led by Inter-American Investment Corporation (IAIC, now IDB Invest), acting on behalf of the IDB Group. The financing includes an A loan of $31.5 million and a B loan of $72.5 million from Banco Santander and Industrial and Commercial Bank of China (ICBC). Both the A and B loans offer a tenor of 9 years door-to-door and will be paid over 20 years. According to World Bank records, ICBC contributed $36.25 million to the syndicate. The ICBC loan component has 9 year maturity and 2 year grace period. Pampa Energía S.A issued a corporate guarantee in support of the loan. Greenwind S.A. was expected to sign a 20-year power purchase agreement (“PPA”) with the wholesale electric market administrator (“CAMMESA”) to inject energy to the national interconnection system (¨SADI¨) via the 500KV-132KV Bahia Blanca substation, at a bidding price of US$59.36/MWh increased annually by an adjustment factor. El Corti wind power project (the “Project” or “El Corti”) will add 98.6 MW of renewable energy to the Argentinean electricity system, thus directly supporting the Government of Argentina’s (“GoA”) priorities to ensure a stable long-term electricity supply and the diversification of its energy matrix with the expected addition of 2.7 GW from renewables sources by 2018. The project consists of the construction, operation, and maintenance of a 98.6MW wind farm, its associated facilities, to be located south of the province of Buenos Aires, 17 km northwest of the city of Bahia Blanca, Argentina. It is expected to reduce CO2 emissions by approximately 213 thousand tons per year. An IDB Invest environmental and social review of the project began in January 2017 and was expected to continue until April 2017. The review included information provided by the project developer ( Greenwind S.A.), such as the environmental impact assessment (EIA) performed in 2011, the first addendum to the EIA (June 2016) describing changes in the project’s design (fewer higher capacity turbines), and the resolutions issued by the Provincial Agency for Sustainable Development (OPDS) in June 2011 and August 2016. In addition, copy of the second addendum to the EIA (March 2017), municipal authorizations, the environmental management plan and its programs, as well as additional studies were reviewed. An IDB Invest field visit was conducted on February 21-24, 2017 and included a visit to the property and adjacent areas and to the Multi-Use Natural Reserve of Bahía Blanca, Bahía Falsa, and Bahía Verde. Meetings and interviews were held with the following entities: the developer’s corporate Quality, Security, Environment and Health (QSEH) team based in Buenos Aires and the Bahía Blanca team based at the Piedra Buena Thermal Power Plant; local environmental consultants for the project; as well as relevant social actors such as municipal authorities, tenants caring for and living on the property, inhabitants of Casco Calderón, and the non-governmental organization (NGO) Aves Argentinas. The project was implemented in 2017 and the first half of 2018. It was completed and officially inaugurated on or around May 25, 2018.