ACP: Multilaterals likely to play bigger role in project finance
Friday, December 12 2008 @ 09:47 PM UTC
Contributed by: Don Winner
PANAMA CANAL FINANCING STRUCTURE
In a scenario where there is no long-term credit from commercial banks to finance large projects, such as the US$5.25bn Panama Canal expansion, the participation of multi laterals has become fundamental.
On December 9, ACP and five multilateral agencies formally signed the agreement for the US$2.3bn financing package that will cover a portion of the project to expand the waterway. The remaining resources for the project will be financed by ACP through Canal-generated cash flow.
"Since the start of negotiations, ACP stuck to the objectives established for the financing strategy for the expansion program, whereby the facility had to be unsecured, untied, with no guarantee, with a 20-year term and a 10-year grace period," Márquez said.
The financing package also had to guarantee no interference with ACP operations or the expansion program, as well as provide competitive pricing, he added.
"The participation of these agencies in the partial financing [of the expansion project] was based on their willingness to work with ACP within these parameters," Márquez said.