In Washington, D.C.: Vanessa Bauza, IFC Phone: 202-458-1603 E-mail: email@example.com In Panama City: Khadine Sanhueza, AES Phone: +507 206-2682 Email: firstname.lastname@example.org
Panama City, Panama – August 2, 2016 —IFC, a member of the World Bank Group, has completed a $150 million financing package for the construction and operation of Central America's first integrated liquefied natural gas (LNG) to power facility. It will ease the dependence on imported fossil fuels and help mitigate electricity shortages by introducing a clean, cost-effective and reliable new energy source to the region.
The project, AES Colón, consists of a 380 megawatt gas-fired power plant and an onshore LNG import and regasification terminal with an 180,000 cubic meter storage tank. The facility is expected to displace at least 2,100 gigawatt hours of power currently generated from heavy fuel oil and diesel, thereby avoiding about one million tons of carbon dioxide emissions each year. That is roughly equivalent to taking more than 200,000 cars off the road. Once operational, the project will offset about 4 percent of Panama's carbon dioxide emissions each year.
AES Colón has a total project cost of approximately $1 billion. Additional capital for the project has been secured through other financial institutions, along with equity investments from the AES Corporation and the Panama-based Motta Group.
“We are honored to have IFC joining us in this transformational project, through which we reaffirm our commitment to Panama and the region,” said Gustavo Pimenta, CFO for AES's Mexico, Central America and Caribbean Strategic Business Unit. “AES Colón will generate significant benefits to the country and contribute to its sustainable development by diversifying the energy matrix with clean natural gas, while providing an avenue for the transformation of other adjacent industries within the regional economy.”
In addition to its direct benefits, natural gas offers synergies with renewable energy. The LNG facility will provide cleaner and more affordable base load power to complement the inherent variability of wind and solar energy. This will make it possible to integrate more renewable power projects into the grid, while balancing electric system loads and ensuring a continuous supply of electricity.
“We are extremely pleased to be working with IFC on this important project to establish the first LNG plant in Central America,” said Stanley A. Motta, President of Motta Group. “Bringing clean power to Panama is a project we and AES have been working on for some time. We are proud to see it become a reality.”
Panama is projected to be Latin America's fastest-growing economy over the next five years. However, infrastructure investments, particularly to increase power generation, have lagged. The Panamanian government projects a 5 percent annual increase in the country's energy demands, which will require significant investments.
“This LNG to power facility is a game-changer for Panama,” said Giancarlo Ortega, IFC Principal Investment Officer. “It leverages an expected growth in natural gas and provides a low-carbon power source for Panama, which has been heavily dependent on seasonal hydropower and vulnerable to fluctuations in oil prices. Introducing LNG as a fuel for electricity will significantly transform the country's energy matrix, supporting a critical component of its growth strategy.”
Introducing LNG is also expected to have broad impacts beyond the power sector: This integrated facility enables industrial users in shipping, transportation and other sectors to convert from using oil products to natural gas. Located on Panama's Atlantic coast, the plant will become operational in the first half of 2018. AES expects to generate approximately up to 2,000 direct jobs during construction.
Since 2010, IFC has provided $1.3 billion for Central America's power sector, including mobilizations from other financial institutions. These projects include, among others, UEP Penonomé II, the largest wind farm in Central America; three solar power plants in Honduras; and the Reventazón hydropower plant, which will bring electricity to half a million homes in Costa Rica. With this LNG to power facility, IFC has supported the financing of over 1.25 GW of new generation capacity in the region in that timeframe.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it's needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org About AES Corporation
The AES Corporation (NYSE:AES) is a Fortune 200 global power company. We provide affordable, sustainable energy to 17 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce of 21,000 people is committed to operational excellence and meeting the world's changing power needs. Our 2015 revenues were $15 billion and we own and manage $37 billion in total assets. To learn more, please visit www.aes.com. Follow AES on Twitter @TheAESCorp.
Since 1999, AES Panama and AES Changuinola, the AES affiliates operating in Panamá, have invested approximately $1,3 billion in assets and currently have 777 MW of installed capacity. With the most recent addition of AES Colón, AES will have an additional 380 MW in its generation portfolio and will continue to help reduce the dependency of the country on oil derivatives.
About Motta Group
The Motta Group is a Panama-based family-owned regional conglomerate that invests in and actively oversees a broad portfolio of companies in aviation, financial services, telecommunications, energy, media, logistics, real estate, and wholesale and retail distribution. The most significant ones are Copa Airlines, the NYSE-listed flagship air carrier of Panama; Banco General and ASSA Compañía de Seguros, Central America's largest locally-owned bank and insurance company, respectively; Cable Onda, Panama's top provider of pay TV and internet; TVN, open television provider; AES Colon, Central America's first LNG power plant and terminal; Manzanillo International Terminal, one of Latin America's largest container ports by volume; Motta Internacional, the Colon Free Zone's oldest company, whose Attenza duty free business is present in more than seven countries in Latin America; and Juegos de Video de Latinoamerica, a joint venture with NYSE-listed GameStop. The Motta Group is headed by Mr. Stanley Motta, a recognized and successful entrepreneur.