Ergon Perù, a company of the Italian Tozzi Green group, has secured $142m financing for its rural electrification project in Peru.
The financing, which is for a period of 13 years, has been provided by Peruvian development bank Cofide (Corporación Financiera de Desarrollo) and Sumitomo Mitsui Banking Corporation (SMBC).
The loan was issued on 28th March following the signing of the loan agreement by Tozzi Green on 16th February.
Cofide and SMBC have each underwritten 50% of the line of credit. SMBC acted as arranger of the agreement. The loan is guaranteed by the project cash flows from a social compensation fund. This fund is fed by the payment of a tariff by customers of the Peruvian utilities and not by the end users.
Ergon Perù will install a minimum of 173,000 solar kits consisting of solar panels, batteries and light bulbs in three off-grid areas in south, central and northern Peru, at a total cost of about USD 181 million. The company will then manage the project – to be completed by mid-2019 – for 15 years.
Ergon Perù was awarded the investment contract in 2015 following an invitation to tender issued by the Supervisory Agency for Investment in Energy and Mining (OSINERGMIN).
The law firm Paul Hastings acted as international legal counsel for the lenders, while Garrigues served as local legal advisor.
The law firm Pillsbury Winthrop Shaw Pittman acted as the borrower’s international lawyer, with Estudio Echecopar in the role of local legal advisor.
Source: Company Press Release