1. Financing Energy Transactions in Latin America
INTER-AMERICAN DEVELOPMENT BANK
Financing Energy Transactions in Latin America
Structured and Corporate Finance Department
October 2008

2. Inter-American Development Bank (IADB)
Regional multilateral institution with 47 member countries dedicated to accelerate economic & social development in Latin America and the Caribbean
Structured and Corporate Finance Department
Responsible for non-sovereign guaranteed operations at IDB
Privately controlled entities in all sectors of the economy
Utilities and other infrastructure operators
Banks and other financial market institutions
Corporates with annual sales of US$100 million and above

3. Non-Sovereign Guaranteed Financing
Operations in 18 countries and two regional funds
US$22.7 billion in investment costs
US$4.2 billion in direct financing and guarantees
US$4.5 billion in syndicated/placed participations
90+ banks and institutional participants in B-Loan program

4. IDB/SCF - Financial Products
Syndicated A and B loan facilities
Financial and political risk guarantees
Financing Parameters:
Financing up to 25-40% of total cost of greenfield transactions
Financing up to 50% in expansions and refinancing
Project Limits at US$200 or US$400 million/exceptional basis
Tenors up to 30 years
Market-based pricing

5. Transaction Cycle INITIAL DESK ANALYSIS & ELEGIBILITY Mandate Letter
SELECTION OF ARRANGER/AGENT BANK, when required
FINANCIAL CLOSING AND DISBURSEMENT
NEGOTIATION OF TERMS AND CONDITIONS
Due Diligence (Legal, regulatory, technical, environmental, economic and financial)
BOARD APPROVAL

6. Energy Financing Electricity Generation and Transmission
Traditional and renewable
Energy Efficiency Investments
Oil & Gas
Infrastructure bottlenecks
Environmental mitigation and upgrades
Biofuels
Cane-based ethanol
Cane outside Brazil and alternative ethanol feedstocks
Biodiesel

7. Generation & Transmission: Sample Projects
ATE II km power transmission line in Brazil
Campos Novos MW hydro-power plant in Brazil
Novatrans - 1,278 km power transmission line in Brazil
TermoPernambuco MW thermal power plant in Brazil
Termobahia MW thermal power in Brazil
Bajio Energy MW combined cycle plant in Mexico
Light Energy Services - CAPEX program for a power distribution company in Brazil
Termoelectrica del Golfo MW thermal power plant in Mexico
Aguaytia MW integrated power project in Peru

8. Transchile 2007 Country: Chile
Description: Construction and operation of 204 km transmission line
Sponsors: Alusa and Cemig (Brazil)
Project Cost: US$68 million
Financing:
A loan US$16 million
B loan US$27 million
Security: Project finance package, equity support
Key contracts: Decreto de Adjudicación for indefinite period, EPC contract
Risk profile: Construction, ROW, regulation
Highlights:
20 year tenor
Work with indigenous community

9. Oil & Gas Capacity Development and Expansion Peru LNG
Production and transportation bottlenecks
Pipelines, terminals, logistics facilities
Environmental mitigation and upgrades
Refinery upgrades

10. Energy Efficiency Investments
Cogeneration
Industrial sector
Agribusiness sector
Biofuels
Green buildings
Financing of ESCOs

11. Biofuels Cane-based ethanol Brazilian capacity expansion CNAA
Cane-based ethanol outside Brazil
Colombia, Peru, Central America, Caribbean
Ethanol from other feedstocks
Sugar beet, sweet sorghum
Biodiesel
Food crops versus non-food crops
Soybeans, jatropha, oil palm

12. Green Energy Program - Objective
Support development, construction and operation of creditworthy Green Energy Projects that:
contribute to the diversification of energy supply
reduce dependence on imported fossil fuels
reduce greenhouse gas emissions and environmental footprint of energy generation
reduce consumption and growth in energy demand
Sectors under the program include biofuels, energy efficiency and renewable energy projects (small-scale hydros, wind, geothermal, wave/currents, solar, biomass, waste-to-energy, other technologies)

13. Green Energy Program - Financial Tools
Debt
senior and structured debt under A/B loan structure from SCF & IIC
subordinated/mezzanine debt from IIC
Guarantees
partial credit
political risk
Equity
equity from IIC
Technical Assistance
InfraFund
SECCI Funds
donor trust funds
Climate Investment Fund (under development)

14. SECCI Initiative
Sustainable Energy and Climate Change Initiative (SECCI)
Expand the development and use of renewable energy sources
$20 million contribution from IDB and $2.8 million contribution from the
United Kingdom
4 Pillars to enable:
Renewable Energy and Energy Efficiency
Biofuels Development
Increasing Access to Carbon Finance
Adaptation to Climate Change

15. Infrafund - Innovation in Infrastructure
Grants to Support Project Preparation:
US$20 million technical assistance fund dedicated to support feasibility studies
Generate bankable projects
Promote infrastructure investments throughout the region
Main Parameters:
Up to US$1.5 million per project
Minimum 20% counterpart financing requirement
Open to any client, public or private

16. Contact Information
Jean-Marc Aboussouan Warren Weissman
Chief Chief
Infrastructure Department Corporate Finance Division
Susan Wermcrantz Davis Carla Tully
Senior Investment Officer Investment Officer
Infrastructure Division Corporate Finance Division
Structured and Corporate Finance Department
Inter-American Development Bank
1300 New York Avenue, N.W.
Washington, DC – USA