Washington, D.C./Bogota, January 10,
2012—IFC, a member of the World Bank Group, arranged a $349 million
financing for Colombian utility Empresas Públicas de Medellín to improve
access to water, sewerage services, and electricity for more than 2.3 million
people in Medellin and its surrounding areas.
The package, IFC’s first financing to a municipal utility company in Colombia,
includes a $25 million, seven-year loan for IFC’s own account and a $324
million syndicated loan. The B Loan includes two tranches, with five- and
seven-year tenors. The syndication, led by IFC as a bookrunner, was heavily
oversubscribed with $750 million in orders from 15 international banks.
That amount was three times the original launch amount of $250 million,
enabling IFC to increase the syndicated loan to $324 million, the maximum
allowed under the financing plan.
Banks participating in the financing are: Bank of Tokyo-Mitsubishi ($60
million), Citibank ($40 million), Bank of America ML ($30 million), SMBC
($30 million), Santander ($22 million), BNP ($22 million), JPMorgan
($22 million), Mizuho ($22 million), Scotia ($22 million), Societe Generale
($22 million), BBVA ($10 million), Goldman Sachs ($7 million), Banco de
Credito e Inversiones ($5 million), Israel Discount Bank ($5 million),
and Republic Bank ($5 million).
“This operation is critical to support EPM’s investment program for the
expansion of water and electricity services to underserved communities
in Medellin and the surrounding areas,” said Oscar Herrera, EPM’s Chief
Financial Officer. “The successful IFC-led financing also shows the confidence
of local and international markets in EPM.”
IFC’s support to EPM’s investment program will help improve water and
sewerage services to about 1.5 million people, create new electricity connections
to more than 150,000 people in rural areas, and create new connections
and street lights for 350,000 in urban areas. It will also help improve
the electricity supply to about 300,000 people through rehabilitation of
connections. Established in 1955, EPM is the largest municipal utility
company in Colombia.
Vincent Gouarne, IFC's Global Director for Infrastructure and Natural Resources,
said: “Our partnership with EPM shows our commitment to continue supporting
well-run public services companies in Latin America that have a strong
development impact and high standards of social and environmental sustainability.
Over half of the 2.3 million beneficiaries of the improvement and expansion
of EPMs water and electricity services are poor.”
"The success of this syndication is a tribute to the high regard in
which the market holds EPM,” said Stefania Berla, IFC Syndications Director.
“The large oversubscription and the willingness of 15 leading international
banks to sign the transaction at the original terms, despite significant
market volatility, demonstrate the continuing availability of bank credit
for well-structured transactions."
Under the subnational program, IFC provides financing without sovereign
guarantees to well-run local governments and public enterprises for essential
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector. We help developing countries
achieve sustainable growth by financing investment, providing advisory
services to businesses and governments, and mobilizing capital in the international
financial markets. In fiscal 2011, amid economic uncertainty across the
globe, we helped our clients create jobs, strengthen environmental performance,
and contribute to their local communities—all while driving our investments
to an all-time high of nearly $19 billion. For more information, visit
Empresas Publicas de Medellin (EPM) is Colombia's largest municipal utility
company, providing electricity, water and wastewater management, and natural
gas services to Medellín metropolitan region and its surrounding areas.
Medellín is Colombia’s second largest industrial city with 3.6 million
people. Although the municipality of Medellin is the sole owner of EPM,
it grants the company administrative and financial autonomy. For more information,