The Inter-American Investment Corporation (IIC), the private sector arm of the Inter-American Development Bank Group (IDB) has closed a 19.5 years amortising B-bond for $135.8m to finance operations of the 70MW Campo Palomas wind farm in Uruguay.
The project is developed by Invenergy, a global leader in renewable energy projects. The transaction marks the first B-bond issued in connection with an IIC A loan and the second such structure deployed by the IDB Group – the first one being the IDB’s Reventazon Hydroelectric Plant in Costa Rica.
Last year, the IIC, in conjunction with DNB Bank ASA (Norway), provided an A/B loan to finance the construction of the wind farm. Following construction completion, the IIC and DNB Markets. structured a B-bond to refinance the existing A/B construction loan.
The B-bond, which benefits from IIC’s umbrella, generated high levels of interest from international institutional investors, resulting in an over-subscription. The B-bond also received a green bond certification from DNV-GL and Baa3 international rating from Moody’s.
This transaction deepens the capital markets interest in the nascent Uruguayan non-conventional renewable energy market, which has grown to represent more than 20% of the energy generated in the country. The B-bond, developed by the IDB Group, is a product designed to allow institutional investors to participate under the A/B loan program.
The A/B loan structure is widely used by multilaterals to mobilize international commercial banking institutions into emerging countries. It is an example of how the IIC can mobilize funding from institutional investors into Latin American renewable infrastructure assets through innovative structures and distribution methods.