ICBC provides $70 million loan to State Grid Chile Investment SpA for acquisition of Chilquinta Energía

Project narrative

In October 2019, State Grid International Development (SGID) signed a share purchase agreement with Sempra Energy (a North American energy infrastructure company) to acquire 100% of its shares in Chilquinta Energía S.A., Chile’s third-largest electricity distribution company, for a total of $2.23 billion. In an open tender, SGID defeated a number of high-profile bidders, including Italian state-controlled utility Enel. Then, in March 2020, the National Economic Prosecutor's Office (FNE), which regulates and enforces competition regulations in Chile, approved the sale of Chilquinta Energía S.A. by Sempra Energy to SGID. In addition, the competition regulator also accepted the acquisition and the merger of the companies Eletrans, Eletrans II and Eletrans III by Chilquinta Energía. On June 19, 2020, State Grid Chile Investment SpA — a wholly owned subsidiary of State Grid Corporation of China — signed three loan agreements worth $320 million to facilitate its acquisition of Chilquinta Energía S.A. from Sempra Energ: a $150 million credit facility from Banco Bilbao Vizcaya Argentaria/Hong Kong; a $70 million loan from Industrial and Commercial Bank of China; and a $100 million loan from Hong Kong and Shanghai Banking Corporation (HSBC). The borrowing terms of these loans are unknown. On June 26, 2020, Sempra Energy completed the sale of its equity interests in its Chilean businesses to SGID. The acquisition included Sempra Energy’s 100 percent interest in Tecnored S.A., which provides electric construction and infrastructure services to Chilquinta and third parties, and its 100 percent interest in Eletrans S.A., which owns, constructs, operates and maintains power transmission.