Washington, June 8, 2006-The International
Finance Corporation, the private sector arm of the World Bank Group, has
signed an agreement to provide a $70 million 10-year revolving credit facility
to Companias Asociadas Petroleras S.A. (CAPSA), an independent Argentine
oil producer operating in the province of Chubut.
The loan facility will finance CAPSA’s capital expenditures, working capital
requirements, and general corporate activities. IFC’s loan package
includes $50 million for IFC’s own account and another $20 million that
IFC helped mobilize from Cordiant Capital of Canada. The 10-year
facility is the longest IFC-syndicated tenor in Argentina since the crisis
Atul Mehta, IFC’s Director for Latin America and the Caribbean, noted,
“This transaction fits well with IFC’s strategy to provide long-term
financing to companies in strategic sectors such as oil, gas, and mining
in Argentina. We look forward to a continued partnership with CAPSA,
a company that shares our vision for sustainability and economic growth.”
IFC’s financing will help sustain employment in the Chubut province, a
remote region with few employment opportunities other than the oil and
gas industry. CAPSA is a source of direct and indirect employment
in the region, and the majority of its workforce is sourced locally. The
company also procures about half of its purchases locally through community
“IFC is happy to provide CAPSA with increased financial flexibility. We
are very pleased with the company’s commitment to environment protection,
as they are operating both mature and new hydrocarbon fields with the same
high environmental standards,” said Somit Varma, Associate Director of
IFC’s Oil, Gas, Mining, and Chemicals Department.
“CAPSA and its shareholders are very pleased with the new agreement with
IFC, which renews a long-term relationship that our institutions have maintained
since 1996 and that we strengthened during the 2001 crisis,” a statement
from CAPSA said.
IFC in Argentina
From July 1, 2005, to March 2006, IFC has committed $233 million for its
own account and an additional $383 million in syndications in private sector
projects in Argentina. IFC’s total portfolio in the country as of
December 2005 is $1,029 million.
In Argentina IFC has been shifting its focus from short-term lines to long-term
financing. IFC’s priorities for its direct investments are to provide
long-term financing and structured finance products to companies and projects
in strategic sectors, with an emphasis on groups expanding on a South-South
basis and on export-oriented or export-facilitating projects. Strategic
sectors include oil, gas, and mining; agribusiness and forestry products;
and the financial sector. IFC is emphasizing high-impact projects such
as housing, as well as support of export-oriented SMEs.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of
FY05 was $19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.