Washington DC, July 13, 2007 –
IFC, a member of the World Bank Group, and oil and gas producer Pan American
Energy LLC, Argentine Branch, signed today a loan agreement to support
Argentina’s economic growth. The $550 million investment will generate
substantial benefits for Argentina through tax and royalty revenues and
employment in Pan American’s areas of operations.
The financing will support the company’s
capital expenditure program for operations in Cerro Dragon, located in
the Golfo San Jorge Basin in southern Argentina.
“The IFC investment will contribute
to the company’s expansion, consistent with our strategy to support the
Argentine oil, gas, and mining sectors,” said Yolande Duhem, IFC’s Senior
Manager for Argentina and the Southern Cone. “PAE's development of its
strategically located gas reserves will continue to be instrumental in
increasing the energy supply needed to support Argentina’s economic growth.”
The loan package comprises a $150 million
loan for IFC’s own account and $400 million raised by IFC from commercial
banks. The 11-year term of IFC’s $150 million loan is the longest debt
maturity extended to an Argentine corporate borrower since the country’s
economic crisis in 2001-2002.
“We have built on our partnership with
Pan American to structure a landmark financing in Argentina,” said Somit
Varma, IFC’s Director for Oil, Gas, Mining, and Chemicals. “IFC is supporting
a company that makes a difference for the local communities in the regions
where it operates, and that provides a clean source of fuel for Argentina.”
Pan American, a joint venture between
BP plc and Bridas Corporation, is Argentina’s second-largest oil and gas
producer, accounting for about 15 percent of the country’s output. Today’s
signing in Washington, D.C., marks the continuation of a long-standing
relationship between the two partners, including IFC’s most recent financing
to Pan American Energy in 2005.
“We are delighted to have built on
our relationship with IFC. This financing will allow us to continue to
invest aggressively in support of Argentina’s economic growth,” said
Felipe Bayón, CEO of Pan American Energy.
Rodolfo Berisso, Pan American’s Vice
President of Finance and Planning, added, “IFC’s team concluded this
complex financing arrangement in a highly efficient manner and a very fast
turnaround time. With IFC’s presence, we have been able to set a new benchmark
for Argentine companies in long-term financing from international commercial
IFC, a member of the World Bank Group,
fosters sustainable economic growth in developing countries by financing
private sector investment, mobilizing capital in the international financial
markets, and providing advisory services to businesses and governments.
IFC’s vision is that poor people have the opportunity to escape poverty
and improve their lives. In FY06, IFC committed $8.3 billion, including
syndications, to 284 investments in 66 developing countries. For more information,
please visit www.ifc.org.