WASHINGTON, D.C., Nov. 11 -- The International Finance Corporation (IFC) today signed a loan agreement with Aguas Argentinas S.A. (Aguas), a new private company operating water and sewerage services for greater Buenos Aires, for a loan of US$172.5 million to be extended by IFC to Aguas. Due to strong market interest, the loan syndication, arranged by IFC, far surpassed the original target of US$77 million, reaching US$134.5 million.
"The success of the syndication demonstrates that there is significant private investor interest to participate in well-structured deals in the water sector," according to Mr. Everett Santos, Director of IFC's Infrastructure Department. "Given Aguas Argentinas' large continuing capital expenditure program, continued access to both international and domestic capital markets is essential. IFC looks forward to working closely with the company on its future financing needs."
IFC approved a US$179.5 million financing package for Aguas, including a loan of up to US$38 million for its own account and an equity investment of up to US$7 million in addition to the syndicated loan, which is IFC's largest ever for a project in Argentina. Fifteen major international banks have agreed to participate in the syndicated loan.
Aguas has a 30-year concession to provide water and sewerage services for the residents of the Greater Buenos Aires region. The company's investment plan allows for the implementation of emergency repairs and major rehabilitation as well as upgrades and expansion of the water and sewerage network. The improvements will help alleviate pollution, improve the quality of drinking water, and contribute to a better environment and better public health in the Argentine capital.
Aguas was formed by an international consortium led by Lyonnaise des Eaux of France, who will have overall managerial responsibility. Other shareholders, besides IFC, are Sociedad Comercial del Plata S.A. (Argentina), Sociedad General de Aguas de Barcelona S.A. (Spain), Meller S.A. (Argentina), Banco de Galicia y Buenos Aires S.A. (Argentina), Compagnie Generale des Eaux (France) and Anglian Water plc. (Great Britain). Aguas' employees have a 10 percent ownership stake in the company.
IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
