Bank of China (Panama) contributes to a $275 million USD syndicated loan for the 233 MW Bayano Hydroelectric Expansion and Upgrade Project and the 122 MW Estí Hydroelectric Project

Project narrative

On September 4, 2002, a syndicate of 18 banks — including the Bank of China (Panama) — signed a $275 million USD limited recourse syndicated loan agreement with AES Panama, S.A. — a joint venture between the Panamanian Government (51% equity stake) and AES Corporation (49% equity stake) but controlled daily by AES — to support the 100 MW Bayano Hydroelectric Expansion and Upgrade Project and the 122 MW Estí Hydroelectric Project. This loan carried a maturity period of seven years with quarterly repayment and only-interest due during the construction phase. This loan was secured by (i.e. collateralized against) the Estí Hydroelectric Project and the Bayano Hydroelectric Power Plant, as well as three other AES Panama-owned projects: the 42 MW La Estrella hydroelectric power plant, the 48 MW Los Valles hydroelectric power plant, and the 40 MW Panama City gas turbines. In addition to BOC (Panama), the following lenders contributed to the loan syndicate: Société Générale S.A. (SocGen), Banco Continental de Panama (BCP), National Bank of Panama, Banistmo Panama, Banistmo Bond Fund, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), Banco General (Panama), Citibank, Banco Agricola, Lloyds TSB, Towerbank International, Banco Salvadoreno, BankBoston, Bac International Bank, Westrust Bank, Wall Street Securities, and BICSA Panama. SocGen, BCP, and National Bank of Panama served as lead arrangers, selling the debt down in single-stage syndication. This was Panama's largest ever private financing. The proceeds of the loan were used to support two projects. The Bayano Hydroelectric Expansion and Upgrade Project sought to expand the Bayano Hydroelectric Power Plant, a 150 MW hydropower dam located in the Chepo District of the Panamá Province, via the addition of a third 88 MW turbine generator and repowering the existing turbines, raising the plant's capacity to 233 MW. The Estí Hydroelectric Project sought to construct a hydropower plant with a capacity of 122 MW and accompanying dams, channels, and tunnels, specifically a 35-5-meter-high and 213-meter long dam on the Chiriquí River and a 60-meter high dam on the Barringón River, located in the Gualaca District of the Chiriquí Province. The engineering, procurement, and construction (EPC) contractor was for a consortium led by Skanska and included GE Energy Sweden AB, Alstom Power Generation, and SwedPower International. Stantec provided engineering services. Construction of the Estí Hydroelectric Project began in 2000. Implementation of the Bayano Hydroelectric Expansion and Upgrade Project began in 2002, with Unit 1 repowered and 88 MW Unit 3A added. As of October 2002, the Estí Hydroelectric Project was 60% complete and scheduled to be finished by November 2003 and the 110 MW Bayano Hydroelectric Expansion and Upgrade Project was scheduled to begin commercial operations in October 2002. Estí began operations in 2003. Additional upgrade works to Bayano, including the repowering of 12 MW Unit 2, were completed in 2004.