IFC approves £394m loan to upgrade PAE’s refinery in Argentina


International Finance Corporation (IFC), a World Bank Group member, has approved $500m (£394.3m) in financing for Pan American Energy (PAE) to support the company in upgrading its refinery in Argentina to produce low-emissions diesel fuel.

IFC’s financing package includes an eight-year loan of $135m (£106.5m) from IFC and $315m (£248.4m) from banks and financial institutions such as Bancaribe, BBVA, Santander, Citi, ICBC, Crédit Agricole and JP Morgan.

It also includes $50m (£39.4m) from IFC’s Managed Co-Lending Portfolio Program (MCPP), a platform where institutional investors can passively participate in IFC’s future loan portfolio.

The financing package is expected to support the country’s effort to transition towards stricter and environmentally friendly fuel standards.

PAE will use the IFC’s financing to fund a multi-year upgrade and expansion of its refinery, which delivers 15% of the country’s refined fuel, in Campana, province of Buenos Aires.

Upon completion of the upgrade programme, the refinery will have capacity to produce ultra-low sulphur diesel, reduce sulphur emissions, make other environmental improvements, and increase access to cleaner fuels.

Pan American Energy CEO Marcos Bulgheroni 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.”

When completed, the refinery will become the first facility in the country to produce cleaner burning ultra-low sulphur diesel. It is also expected to help reduce Argentina’s reliance on imported fuels.

IFC Argentina and the Southern Cone regional manager David Tinel said: “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.

“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.”

Image: IFC’s financing packaging will support Pan American Energy in producing low-emission diesel. Photo: Image by LEEROY Agency from Pixabay.

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