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INTER-AMERICAN DEVELOPMENT BANK
Financing Energy Transactions in Latin America
Structured and Corporate Finance Department
October 2008
Inter-American Development Bank (IADB)
Regional multilateral institution with 47 member countries dedicated to accelerate
economic & social development in Latin America and the Caribbean
Structured and Corporate Finance Department

Responsible for non-sovereign guaranteed operations at IDB
 Privately controlled entities in all sectors of the economy
 Utilities and other infrastructure operators
 Banks and other financial market institutions
 Corporates with annual sales of US$100 million and above
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
1
Non-Sovereign Guaranteed Financing

Operations in 18 countries and two regional funds

US$22.7 billion in investment costs
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US$4.2 billion in direct financing and guarantees
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US$4.5 billion in syndicated/placed participations

90+ banks and institutional participants in B-Loan program
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
2
IDB/SCF - Financial Products
Financial Products:
 Syndicated A and B loan facilities
 Financial and political risk guarantees
Financing Parameters:
 Financing up to 25-40% of total cost of greenfield transactions
 Financing up to 50% in expansions and refinancing
 Project Limits at US$200 or US$400 million/exceptional basis
 Tenors up to 30 years
 Market-based pricing
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
3
Transaction Cycle
INITIAL DESK ANALYSIS & ELEGIBILITY
Mandate Letter
SELECTION OF ARRANGER/AGENT BANK, when required
NEGOTIATION OF TERMS AND CONDITIONS
Due Diligence (Legal, regulatory, technical, environmental, economic and financial)
BOARD APPROVAL
FINANCIAL CLOSING AND DISBURSEMENT
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
4
Energy Financing

Electricity Generation and Transmission

Traditional and renewable

Energy Efficiency Investments
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Oil & Gas
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Infrastructure bottlenecks

Environmental mitigation and upgrades
Biofuels

Cane-based ethanol

Cane outside Brazil and alternative ethanol feedstocks

Biodiesel
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
5
Generation & Transmission: Sample
Projects

ATE II - 937 km power transmission line in Brazil
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Campos Novos - 880 MW hydro-power plant in Brazil
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Novatrans - 1,278 km power transmission line in Brazil
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TermoPernambuco - 520 MW thermal power plant in Brazil
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Termobahia - 190 MW thermal power in Brazil
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Bajio Energy - 600 MW combined cycle plant in Mexico
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Light Energy Services - CAPEX program for a power distribution company in Brazil
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Termoelectrica del Golfo - 230 MW thermal power plant in Mexico
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Aguaytia - 240 MW integrated power project in Peru
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
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Transchile 2007
 Country:
Chile
 Description:
Construction and operation of 204 km transmission line
 Sponsors:
Alusa and Cemig (Brazil)
 Project Cost:
US$68 million
 Financing:
 A loan
US$16 million
 B loan
US$27 million
 Security:
Project finance package, equity support
 Key contracts:
Decreto de Adjudicación for indefinite period, EPC contract
 Risk profile:
Construction, ROW, regulation
Highlights:
 20 year tenor
 Work with indigenous community
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
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Oil & Gas

Capacity Development and Expansion

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Production and transportation bottlenecks

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Peru LNG
Pipelines, terminals, logistics facilities
Environmental mitigation and upgrades

Refinery upgrades
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
8
Energy Efficiency Investments

Cogeneration

Industrial sector

Agribusiness sector

Biofuels

Green buildings

Financing of ESCOs
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
9
Biofuels


Cane-based ethanol

Brazilian capacity expansion

CNAA
Cane-based ethanol outside Brazil

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Ethanol from other feedstocks


Colombia, Peru, Central America, Caribbean
Sugar beet, sweet sorghum
Biodiesel

Food crops versus non-food crops

Soybeans, jatropha, oil palm
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
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Green Energy Program - Objective


Support development, construction and operation of creditworthy Green
Energy Projects that:
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contribute to the diversification of energy supply
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reduce consumption and growth in energy demand
reduce dependence on imported fossil fuels
reduce greenhouse gas emissions and environmental footprint of
energy generation
Sectors under the program include biofuels, energy efficiency and
renewable energy projects (small-scale hydros, wind, geothermal,
wave/currents, solar, biomass, waste-to-energy, other technologies)
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
11
Green Energy Program - Financial Tools

Debt

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Guarantees

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partial credit
political risk
Equity

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senior and structured debt under A/B loan structure from SCF & IIC
subordinated/mezzanine debt from IIC
equity from IIC
Technical Assistance
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InfraFund
SECCI Funds
donor trust funds
Climate Investment Fund (under development)
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
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SECCI Initiative
Sustainable Energy and Climate Change Initiative (SECCI)


Expand the development and use of renewable energy sources
$20 million contribution from IDB and $2.8 million contribution from the
United Kingdom
4 Pillars to enable:

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Renewable Energy and Energy Efficiency
Biofuels Development
Increasing Access to Carbon Finance
Adaptation to Climate Change
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
13
Infrafund - Innovation in Infrastructure
Grants to Support Project Preparation:


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US$20 million technical assistance fund dedicated to support feasibility studies
Generate bankable projects
Promote infrastructure investments throughout the region
Main Parameters:
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Up to US$1.5 million per project
Minimum 20% counterpart financing requirement
Open to any client, public or private
INTER-AMERICAN DEVELOPMENT BANK
STRUCTURED AND CORPORATE FINANCE DEPARTMENT
14
Contact Information
Jean-Marc Aboussouan
Warren Weissman
Chief
Chief
Infrastructure Department
Corporate Finance Division
Email: [email protected]
Email: [email protected]
Susan Wermcrantz Davis
Carla Tully
Senior Investment Officer
Investment Officer
Infrastructure Division
Corporate Finance Division
Email: [email protected]
Email: [email protected]
Structured and Corporate Finance Department
Inter-American Development Bank
1300 New York Avenue, N.W.
Washington, DC 20577 – USA
http://www.iadb.org/pri/