WASHINGTON, D.C., Dec. 10 -- The International
Finance Corporation (IFC) has approved financing of $80 million for Compania
General de Combustibles S.A. (CGC), an energy company based in Argentina.
The agreement was signed at IFC headquarters in Washington, D.C. today.
The financing consists of an equity investment of US$15 million and loans
of US$65 million, of which US$25 million will be for IFC's own account
and US$40 million will be syndicated with commercial banks and other financial
institutions. It will help CGC develop hydrocarbon reserves, expand and
modernize marketing operations and petroleum product handling facilities,
and increase working capital. CGC is a fully-owned subsidiary of Sociedad
Commercial del Plata S.A., which is one of Argentina's blue-chip companies
and has interests in energy, engineering, construction, and public services.
"Argentina's hydrocarbon sector has been transformed in the past two
and a half years and is now the country's most open and dynamic industry
as a result of t
he government's privatization and deregulation efforts," said Mr.
M. A. K. Alizai, Director of IFC's Oil, Gas, and Mining Department. "Argentina
is increasing its exports of hydrocarbon products to neighbouring markets
and IFC's financing of this high-priority area is critical to sustaining
the country's economic growth." The CGC project meets World Bank environmental
requirements and will be monitored to ensure compliance. IFC is the private
sector arm of the World Bank Group and the largest multilateral source
of financing for private sector projects in developing countries. (30)