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 banks.”
About IFC
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
.
