Spotlight: Top 5 LatAm project finance operations through Q3

Latin American project finance operations in the third quarter totaled US$6.26bn, compared to US$4.67bn in Q2, according to data Dealogic compiled for BNamericas.

Despite the increase, the volume is still below 2019 levels, while the economic effects of the COVID-19 outbreak will persist for some time.

Overall, 34 operations were registered, compared with 45 in Q2.

Project finance operations in the first nine months of the year totaled US$15.6bn, down nearly 60% from US$39bn in the same period of 2019. 

Yet, "the volume of projects under study and already under structuring allows us to affirm that for the next few quarters we will have a recovery in the volume of project finance operations," Frederico Araujo Turolla, an infrastructure expert at consultancy Pezco Economics, told BNamericas.

“During the worst phase of the COVID-19 outbreak in the region, a lot of operations were on stand-by, but now they are being resumed,” he said.

Most operations registered this year were in Brazil, amounting to nearly US$10bn.

Brazil is likely to remain dominant because of the government’s infrastructure concessions agenda.

"About Brazil specifically, in addition to the traditional sectors of infrastructure, energy that are demanding project finance, we will see a lot of operations in the area of sanitation, which is a segment that will see a wave of concessions and projects advancing," said Araujo Turolla. 

BNamericas takes a look at Latin America’s top five project finance operations by September 30.

Celulose wood pulp plant – Brazil (US$1.8bn)

LD Celulose, a joint venture between Lenzing and Duratex, raised US$1.8bn to build one of the world’s largest dissolving wood pulp plants in Minas Gerais state. The operation includes a US$1bn loan, while the rest was raised via equity operations.

IDB Invest, a member of the IDB Group, and IFC, a member of the World Bank Group, were the co-leaders of the financing.

AES Panama Generation Holdings – Panama (US$1.5bn)

Citigroup Global Markets, J.P. Morgan, Scotia Capital, Credit Suisse Securities, and Banco General were the coordinators of a refinancing operation arranged by AES Panama Generation Holdings. The proceeds will support various AES companies in Panama.

FPSO Búzios – Brazil (US$1.35bn)

The operation entails the construction of the 5MV floating production storage and offloading project for Búzios field. Modec will build the FPSO unit with the capacity to produce up to 150,000b/d of oil and 212Mf3/d of gas. It will also be able to store 1.4Mb (million barrels) of oil. BMV32 will provide FPSO vessel chartering services, including leasing, operation and maintenance services to Petrobras for 21 years.

Japan’s Bank for International Cooperation signed a US$491mn loan agreement with Dutch company Buzios5 MV32 B.V., which is incorporated by Modec, Mitsui&Co., Mitsui O.S.K. Lines, and Marubeni Corporation.

The loan was co-financed by MUFG Bank (the facility agent), Sumitomo Mitsui Banking Corporation, Mizuho Bank, ING Bank, Société Générale, Citibank, Clifford Capital, Standard Chartered Bank and BNP Paribas.

Projeto Jaguar – Serra da Babilonia – Brazil (US$622mn)

The project entails the construction of a 136MW wind farm in Varzea Nova, Bahia state.

Huemul – Chile (US$566mn)

The operation comprises Ireland’s Mainstream Renewable Power’s financing deal to develop five renewable projects the company looks to start up in 2021 and 2022.

Inter-American Investment Corp., Citibank, DNB ASA, KfW IPEX-Bank and Mitsubishi UFJ Financial Group, along with Banco Santander Chile arranged the operation.

Huemul’s portfolio consists of the Ckani and Llanos del Viento wind farms and the Pampa Tigre and Valle Escondido solar plants in northern Chile, as well as the Puelche Sur wind farm in southern Chile, with a total capacity of 630MW.