IFC Supports Water, Electricity Services for 2.3 Million People in Colombia with $349 Million Financing

The package, IFC’s first financing to a municipal utility company in Colombia, includes a $25 million, seven-year loan for IFC’s own account and a $324 million syndicated loan. The B Loan includes two tranches, with five- and seven-year tenors. The syndication, led by IFC as a bookrunner, was heavily oversubscribed with $750 million in orders from 15 international banks. That amount was three times the original launch amount of $250 million, enabling IFC to increase the syndicated loan to $324 million, the maximum allowed under the financing plan.

 

Banks participating in the financing are: Bank of Tokyo-Mitsubishi ($60 million), Citibank ($40 million), Bank of America ML ($30 million), SMBC ($30 million), Santander ($22 million), BNP ($22 million), JPMorgan ($22 million), Mizuho ($22 million), Scotia ($22 million), Societe Generale ($22 million), BBVA ($10 million), Goldman Sachs ($7 million), Banco de Credito e Inversiones ($5 million), Israel Discount Bank ($5 million), and Republic Bank ($5 million).

 

“This operation is critical to support EPM’s investment program for the expansion of water and electricity services to underserved communities in Medellin and the surrounding areas,” said Oscar Herrera, EPM’s Chief

Financial Officer. “The successful IFC-led financing also shows the confidence of local and international markets in EPM.”

 

IFC’s support to EPM’s investment program will help improve water and sewerage services to about 1.5 million people, create new electricity connections to more than 150,000 people in rural areas, and create new connections and street lights for 350,000 in urban areas. It will also help improve the electricity supply to about 300,000 people through rehabilitation of connections. Established in 1955, EPM is the largest municipal utility company in Colombia.

 

Vincent Gouarne, IFC's Global Director for Infrastructure and Natural Resources, said: “Our partnership with EPM shows our commitment to continue supporting well-run public services companies in Latin America that have a strong development impact and high standards of social and environmental sustainability. Over half of the 2.3 million beneficiaries of the improvement and expansion of EPMs water and electricity services are poor.”

 

"The success of this syndication is a tribute to the high regard in which the market holds EPM,” said Stefania Berla, IFC Syndications Director. “The large oversubscription and the willingness of 15 leading international banks to sign the transaction at the original terms, despite significant market volatility, demonstrate the continuing availability of bank credit for well-structured transactions."

 

Under the subnational program, IFC provides financing without sovereign guarantees to well-run local governments and public enterprises for essential infrastructure investments.