WASHINGTON, D.C., Oct. 12 -- The International Finance Corporation (IFC) has signed a US$70 million financing agreement with Bridas SAPIC of Argentina to assist in the development and recovery of oil and gas properties and the implementation of a new exploration program.
Prior to this year, Argentine oil companies were able to access the international capital markets for medium-term funding. However, Latin American companies have faced tighter international credit conditions throughout most of 1995.
IFC is providing a US$20 million loan and a US$10 million equity investment for its own account and is arranging a syndicated loan of up to US$40 million with international financial institutions.
"IFC is playing an important role in mobilizing funding for Bridas during a time of tightened access to capital," according to Mr. M. Azam K. Alizai, Director of IFC's Oil, Gas and Mining Department. "The project will also help position the company to take advantage of good regional export opportunities in natural gas and strengthen regional economic integration," he added.
Natural gas accounts for about 40 percent of total primary energy consumption in Argentina, but for a far lower share (less than 10 percent) in its neighboring countries. The project will contribute to an expanding gas network in the region that could eventually link Argentina, Bolivia, Brazil and Chile.
IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan finance for private sector projects in the developing world.
