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June 26, 2019—IFC, a member of the World Bank Group, approved a financing package for up to US$500 million for Pan American Energy (PAE) to help the company finalize an expansion and upgrade of its refinery in Argentina to produce lower-emission diesel fuels and support the country’s transition toward stricter and environmentally friendly fuel standards.
The financing package consists of an eight-year loan of US$135 million from IFC and US$315 million from several commercial banks and other financial institutions including Bancaribe, BBVA, Santander, Citi, ICBC, Crédit Agricole and JP Morgan. The package also includes US$50 million from IFC’s Managed Co-Lending Portfolio Program (MCPP), a platform that allows institutional investors the opportunity to passively participate in IFC’s future loan portfolio.
Marcos Bulgheroni, CEO of Pan American Energy, said: “We are delighted to have built on our long-standing relationship with IFC, in a transaction that will allow us to complete the expansion of our Campana refinery, representing a big step for Argentina towards production of cleaner fuels. We believe that IFC’s interest in environmental and social responsibility will only help us improve on a strong industry-leading performance.”
IFC’s financing will be used to complete a large scale, multi-year upgrade and expansion of PAE’s refinery, which provides about 15 percent of the country’s refined fuel, in Campana, province of Buenos Aires. The completion of this program will ensure that the refinery can produce ultra-low sulfur diesel, reduce sulfur emissions, make other environmental improvements, and increase access to cleaner fuels. This increased supply will help reduce Argentina’s reliance on imported fuels and expand availability of efficient and cleaner fuels contributing to better air quality. It will be the first refinery with the capacity to produce cleaner burning ultra-low sulfur diesel in Argentina.
This investment is aligned with the World Bank Group’s country partnership framework for Argentina, which emphasizes the need to foster private investment and strengthen the competitiveness of the country’s private sector, as well as the need to reduce the country’s global environmental footprint.
“We are confident that this loan will play an important role in helping Argentina meet its growing energy demands while at the same time transitioning to cleaner types of fuels,” said David Tinel, IFC’s regional manager for Argentina and the Southern Cone. “In a context of limited availability of long-term capital, supporting Argentina’s private sector is more critical than ever – especially for projects that help reduce imports and contribute domestic value addition,” he said.
In Argentina, IFC has committed approximately US$1.3 billion in sustainable private sector projects over the past 18 months, becoming a major international source of financing to the country’s private sector during this period.
IFC’s strategy in Argentina focuses on financing projects with significant development impact that spurs economic growth – particularly through increased exports – innovation and job creation. Priority sectors include agribusiness, infrastructure, energy, manufacturing, and financial intermediaries to reach SMEs. Through its advisory programs, IFC works with governments and companies to help establish the conditions that will attract the most private capital, enabling the private sector to grow and create jobs.
