Corporación Interamericana para el Financiamiento de Infraestructura S.A. (CIFI) granted a 2-year USD 10 million loan to Empresa de Generación Eléctrica Santa Lorenza S.A.C., owner of the concession for the development of the 18.7 MW Santa Lorenza hydropower plant located in the province of Ambo, department of Huánuco.

The loan will be used for the construction and development of the hydropower plant and an associated 2,88 km. transmission line.

Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados (Lima) and Jones Day (Miami) acted as legal counsel to the borrower.

According to Muñiz, the loan was granted under a “mini perm” structure and will be disbursed in two tranches of US$ 5 million to pay the contractors in charge of the construction of the project and buy key equipment to continue developing the project.

The loan granted by CIFI is expected to be refinanced through the granting to Santa Lorenza of a long-term loan under a project finance structure in the next 12 months to ensure the financial closure of the project, the cost of which stands at USD 64 million.

The Santa Lorenza hydropower plant is expected to commence operations in 2019. Construction is 58% complete. The plant will be equipped with two Francis turbines -which an estimated power of 9,73 each – and will use water from the Huallaga River.

The concession agreement was signed in February 2014 and the date of commencement of commercial operations was set for December 31, 2017, according to data obtained from the Supervisory Board for Investment in Energy and Mining (Osinergmin).

Founded in 2001 by the Spanish bank Bankia and the Inter-American Investment Corporation, CIFI finances small and medium-scale energy, telecommunication, gas & oil, construction and transportation infrastructure projects in Latin America and the Caribbean. According to CIFI, 25% of the investment has been earmarked for the Andean region.