Perú: US$75 million granted for Camisea gas project

US$75-million loan agreement signed for Camisea gas transport system in Peru.

A loan agreement for up to $75 million, with a 14-year term and one year´s grace, was signed today between the Andean Development Corporation (CAF) and Transportadora de Gas del Perú (TGP). The operation will partially finance the execution of the Camisea gas transport system project.

CAF Executive President Enrique García emphasized the priority nature of the Camisea project for Peru. The substitution of coal and imported oil products by gas from Camisea will reduce environmental pollution, cut electricity costs, improve the balance-of-payments position, generate high tax revenue, and in general strengthen the country´s economic competitiveness.

The loan will finance the construction and installation of two pipelines for the transport of gas and liquids from the Camisea fields to the cities of Lima and El Callao.

Under an A/B loan structure, the CAF will provide US$50 million in direct finance for the A tranche. The B tranche, with a maximum value of US$25 million, will receive funds from other financial institutions interested in the project.

The Camisea project has three components: production, transport and distribution. The project studies gave priority to minimizing the impact of environmental and social variables. The loan signed today will finance the transport component.

CAF participation, along with other international financial institutions, guarantees the implementation of a rigorous environmental and social management plan in all components of the project.

The transport component of the project will be executed by TGP, whose shareholders are Tecgas (Argentina); Hunt Oil (USA); Tractebel (Belgium); SK (South Korea), Sonatrach (Algeria); Pluspetrol (Argentina); and Graña & Montero (Perú).

Because of its impact on the economy, the Camisea project, with a total value of around US$1.60 billion, is one of the most important investments in Peruvian history.