China Co-financing Fund for LAC provides $42.5 million loan for LNG Storage Unit Project

On February 17, 2021, IDB Invest, the private sector arm of the Inter-American Development Bank (IDB) Group, signed a 128.3 million financial package with FSRU, Ltda. de C.V, a Salvadorian company, and FSRU Development Pte Ltd., a Singaporean firm, for the creation of a Floating Storage and Regasification Unit (“FSRU”) to be moored 1.2 km offshore of the Port of Acajutla, located in the Department of Sonsonate, El Salvador. The financing included a 42.5 million USD loan from the China Co-Financing Fund for Latin America and the Caribbean specifically to FSRU Ltda. de CV in El Salvador. Both this loan and the IDB Invest loan of 85.8 million USD have a 15 year repayment period. The tender for the project was won by Energía del Pacífico in 2012. According to EDP, project financing came from Overseas Private Investment Corporation, International Finance Corporation, IDB Invest (which administers the funds from the China Co-Financing Fund for LAC), Finnish Export Credit Ltd and KfW IPEX-Bank. White & Case served as transaction counsel, Arias as Salvadoran counsel and Astris Finance acted as financial advisor for EDP. Total financing for the project was over USD $1 billion. The FSRU is a key component of the 378 MW Energía del Pacífico natural gas power plant project, which is intended to expand El Salvador's energy capacity. The FSRU will be created from a converted liquified natural gas (LNG) tanker and will have 137,000 m3 of gross LNG storage capacity and a regasification capacity of 280 MMcf/day. According to Invenergy, the commercial operation date will be in 2022. Once in operation, this initiative and the Energía del Pacífico plant are expected to increase El Salvador's installed energy capacity by 20% with the adoption of a new generation technology based on a cleaner and more cost-effective fuel. FSRU, Ltda. de C.V. and FSRU Development Pte Ltd. are both jointly owned by Invenergy, a multinational based in the United States, and BW LNG, another multinational company. Initial construction works on the project were started in January 2019, with construction of the FSRU's regasification module beginning in April 2020. In November 2021, technology company Wärtsilä announced that it had completed installation of the FSRU. The floating regasification and storage vessel BW Tatiana arrived in Acajutla port in November 2021, and the FSRU received its first delivery of LNG in April 2022. The BW Tatiana previously served in Shell’s LNG fleet as the Gallina, a Moss-type LNG carrier, before being converted into an FSRU at Singapore’s Keppel Shipyard in 2020. The associated Pacífico Acajutla power station began commercial operations shortly thereafter, in May 2022.

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