The European Investment Bank is providing a USD 70 million loan (some EUR 76 million) to Central Dock Sud S.A., owned by YPF-REPSOL (40%), ENDESA (40%), and Panamerican Energy (20%), to build a new gas-fired electric power plant in the Buenos Aires metropolitan area.
Central Dock Sud S.A. is one of the most competitive power generators in Argentina. It was privatised in 1992 and its present owners acquired control in 1996.
The power plant is completely rebuilt to generate electricity for sale to consumers in the Greater Buenos Aires area, the main economic region in the country. The new combined-cycle gas turbine power plant is designed to run on natural gas. Its nominal net capacity is 775 MW, some 3% of Argentina's total installed capacity.
The project will have a positive impact on the environment by using natural gas as a main fuel, which combined with modern low-emission combustion technology results in a lower level of atmospheric pollution. The project is able to comply with national and provincial emission and air quality requirements.
The 12-year loan with two years grace period can be disbursed either at fixed rates or at floating rates, the latter being capped at LIBOR + 40 basis points. It is guaranteed by BNP Paribas and Société Générale to 50% each. Risks of currency non-transfer, expropriation, war and civil disturbance are covered by the European Union (EU) budget guarantee.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration. The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 150 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America. In 2000, the EIB provided loans totalling some EUR 36 billion. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB works on a non-profit basis and can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investments with other institutions.