State-owned petroleum company Petroperú has closed a US$1.3bn export credit agency-backed financing as part of its US$5bn Talara refinery modernisation project.
Deutsche Bank acted as facility agent for the syndicate, which also involves BBVA, BNP Paribas, Citi, HSBC, JP Morgan and Santander as initial mandated lead arrangers, underwriters and bookrunners. It is the largest-ever financing covered by the Spanish export credit agency, Cesce, and is the largest ECA financing arranged in Peru.
The financing will support an engineering, procurement and construction (EPC) contract, led by Spanish multinational engineering firm Técnicas Reunidas. Further funding for the modernisation comes from two 15-year and 30-year bond placements for a total of US$2bn carried out in June 2017. During 2019, Petroperú aims to complete the debt process to finance the project, and is widely expected to turn to the bond markets.
Speaking at the closing of the deal, Eduardo Más, director of structured trade and export finance at Deutsche Bank, says: “To conclude the largest-ever ECA deal in Peru, one of the most sophisticated financial markets in Latin America, is a significant achievement. Our proposal properly balanced risks and rewards, and required great discipline from multiple teams involved, from compliance to administration, both during the origination and execution periods.”
Works are expected to be completed in December 2020, when the facility, located in north-western Peru, will refine both light and heavy crude, increasing its margin from US$4-US$5 per barrel to US$8-US$9 per barrel.