[China Co-Financing Fund] IDB administers 12 million USD loan from CHC to Adelca for Steel Plant in Milagro

Project narrative

On 30 October 2015, the Inter-American Development Bank (IDB) signed a loan contract with Acería del Ecuador C.A. - Adelca (Adelca) to finance the construction of a steel plant in Milagro, through which the IDB would provide 37 million USD from its ordinary capital (Loan 3475A/OC-EC), and the People's Bank of China would provide 12 million USD (Loan 3475/CH-EC) via the China Co-Financing Fund for Latin America and the Caribbean (CHC). The IDB lists the total anticipated project cost as 131 million USD, with Adelca expected to provide 82 million USD of counterpart financing. The IDB approval date for this loan financing was 20 May 2015, and it refers to this project as "EC-L1144 : Adelca". This project is intended to support development in Ecuador's construction and infrastructure sectors, given the importance of steel in these industries. The steel plant in Milagro, Guayas, will be used to recycle scrap metal, and will have a capacity of 400,000 tons per year. It is estimated to have created about 450 jobs, and it will produce "value added steel products"–such as wire rod, straight rod, and rolled rod–while also integrating small scrap collectors into Adelca's value chain. According to Adelca's 2017 Memoria de Sostenibilidad, construction began in the first quarter of 2014. The first phase was complete in the last quarter of 2016, with the start of the rolling mill, and the smelting process is expected to start operations in the first quarter of 2018. In February 2016, the facilities were reported to be about 65% complete by El Telégrafo. The project status is listed as "Closed" by the IDB, but no precise commercial operation date is available. The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Record ID#86526.