Panama City, Panama – August 2, 2016
— IFC, a member of the World Bank Group, has completed a $150 million
financing package for the construction and operation of Central America’s
first integrated liquefied natural gas (LNG) to power facility. It will
ease the dependence on imported fossil fuels and help mitigate electricity
shortages by introducing a clean, cost-effective and reliable new energy
source to the region.
The project, AES Colón, consists of
a 380 megawatt gas-fired power plant and an onshore LNG import and regasification
terminal with an 180,000 cubic meter storage tank. The facility is
expected to displace at least 2,100 gigawatt hours of power currently generated
from heavy fuel oil and diesel, thereby avoiding about one million tons
of carbon dioxide emissions each year. That is roughly equivalent to taking
more than 200,000 cars off the road. Once operational, the project will
offset about 4 percent of Panama’s carbon dioxide emissions each year.
AES Colón has a total project cost of
approximately $1 billion. Additional capital for the project has
been secured through other financial institutions, along with equity investments
from the AES Corporation and the Panama-based Motta Group.
“We are honored to have IFC joining
us in this transformational project, through which we reaffirm our commitment
to Panama and the region,” said Gustavo Pimenta, CFO for AES’s Mexico,
Central America and Caribbean Strategic Business Unit. “AES Colón will
generate significant benefits to the country and contribute to its sustainable
development by diversifying the energy matrix with clean natural gas, while
providing an avenue for the transformation of other adjacent industries
within the regional economy.”
In addition to its direct benefits,
natural gas offers synergies with renewable energy. The LNG facility will
provide cleaner and more affordable base load power to complement the inherent
variability of wind and solar energy. This will make it possible to integrate
more renewable power projects into the grid, while balancing electric system
loads and ensuring a continuous supply of electricity.
“We are extremely pleased to be working
with IFC on this important project to establish the first LNG plant in
Central America,” said Stanley A. Motta, President of Motta Group. “Bringing
clean power to Panama is a project we and AES have been working on for
some time. We are proud to see it become a reality.”
Panama is projected to be Latin America’s
fastest-growing economy over the next five years. However, infrastructure
investments, particularly to increase power generation, have lagged. The
Panamanian government projects a 5 percent annual increase in the country’s
energy demands, which will require significant investments.
“This LNG to power facility is a game-changer
for Panama,” said Giancarlo Ortega, IFC Principal Investment Officer.
“It leverages an expected growth in natural gas and provides a low-carbon
power source for Panama, which has been heavily dependent on seasonal hydropower
and vulnerable to fluctuations in oil prices. Introducing LNG as a fuel
for electricity will significantly transform the country’s energy matrix,
supporting a critical component of its growth strategy.”
Introducing LNG is also expected to
have broad impacts beyond the power sector: This integrated facility enables
industrial users in shipping, transportation and other sectors to convert
from using oil products to natural gas. Located on Panama’s Atlantic coast,
the plant will become operational in the first half of 2018. AES expects
to generate approximately up to 2,000 direct jobs during construction.
Since 2010, IFC has provided $1.3 billion
for Central America’s power sector, including mobilizations from other
financial institutions. These projects include, among others, UEP Penonomé
II, the largest wind farm in Central America; three solar power plants
in Honduras; and the Reventazón hydropower plant, which will bring electricity
to half a million homes in Costa Rica. With this LNG to power facility,
IFC has supported the financing of over 1.25 GW of new generation capacity
in the region in that timeframe.
IFC, a member of the World Bank Group,
is the largest global development institution focused on the private sector
in emerging markets. Working with 2,000 businesses worldwide, we use our
six decades of experience to create opportunity where it’s needed most.
In FY16, our long-term investments in developing countries rose to nearly
$19 billion, leveraging our capital, expertise and influence to help the
private sector end extreme poverty and boost shared prosperity. For more
information, visit www.ifc.org
About AES Corporation
The AES Corporation (NYSE:AES) is a
Fortune 200 global power company. We provide affordable, sustainable energy
to 17 countries through our diverse portfolio of distribution businesses
as well as thermal and renewable generation facilities. Our workforce of
21,000 people is committed to operational excellence and meeting the world’s
changing power needs. Our 2015 revenues were $15 billion and we own and
manage $37 billion in total assets. To learn more, please visit www.aes.com.
Follow AES on Twitter @TheAESCorp.
Since 1999, AES Panama and AES Changuinola,
the AES affiliates operating in Panamá, have invested approximately $1,3
billion in assets and currently have 777 MW of installed capacity. With
the most recent addition of AES Colón, AES will have an additional 380
MW in its generation portfolio and will continue to help reduce the dependency
of the country on oil derivatives.
About Motta Group
The Motta Group is a Panama-based family-owned
regional conglomerate that invests in and actively oversees a broad portfolio
of companies in aviation, financial services, telecommunications, energy,
media, logistics, real estate, and wholesale and retail distribution. The
most significant ones are Copa Airlines, the NYSE-listed flagship air carrier
of Panama; Banco General and ASSA Compañía de Seguros, Central America’s
largest locally-owned bank and insurance company, respectively; Cable
Onda, Panama’s top provider of pay TV and internet; TVN, open television
provider; AES Colon, Central America’s first LNG power plant and terminal;
Manzanillo International Terminal, one of Latin America’s largest container
ports by volume; Motta Internacional, the Colon Free Zone’s oldest company,
whose Attenza duty free business is present in more than seven countries
in Latin America; and Juegos de Video de Latinoamerica, a joint venture
with NYSE-listed GameStop. The Motta Group is headed by Mr. Stanley Motta,
a recognized and successful entrepreneur.