Pan American Energy will use the financing to upgrade its refinery in Argentina to produce ultra-low emission diesel fuel

IFC

Image: IFC to support Pan American Energy in producing low-emission diesel. Photo: Courtesy of Markus Naujoks/Pixabay.

International Finance Corporation (IFC), a World Bank Group member, has agreed to provide $500m (£394.3m) to Pan American Energy (PAE) to support the company in upgrading its refinery in Argentina to produce low-emissions diesel fuel.

The financing to producing low-emission diesel fuel is expected to support the country in its transition towards stricter and environmentally friendly fuel standards.

IFC’s financing package includes an eight-year loan of $135m (£106.5m) from IFC and $315m (£248.4m) from banks and financial institutions such as Bancaribe, BBVA, Santander, Citi, ICBC, Crédit Agricole and JP Morgan.

The package also includes $50m (£39.4m) from IFC’s Managed Co-Lending Portfolio Program (MCPP), a platform where institutional investors can passively participate in IFC’s future loan portfolio.

IFC’s financing to help Pan American Energy initiate a multi-year upgrade of the refinery

The financing from IFC will be used in a multi-year upgrade and expansion of Pan American Energy refinery, which delivers 15% of the country’s refined fuel, in Campana, province of Buenos Aires.

The programme’s completion will ensure that the refinery of Pan American Energy will be able to produce ultra-low sulfur diesel, reduce sulfur emissions, improve environmental outcomes and increase access to cleaner fuels.

The refinery is expected to be the first in the country with the capacity to produce cleaner burning ultra-low sulfur diesel.

Pan American Energy CEO Marcos Bulgheroni said: “We are delighted to have built on our long-standing relationship with IFC, in a transaction that will allow us to complete the expansion of our Campana refinery, representing a big step for Argentina towards production of cleaner fuels.

“We believe that IFC’s interest in environmental and social responsibility will only help us improve on a strong industry-leading performance.”

As per IFC, the investment aligns with World Bank’s country partnership framework for Argentina, which focuses on fostering private investment and to strengthen the competitiveness in the country’s private sector, while also reducing the country’s global environmental footprint.