A group of six international lenders have provided a $770 million loan package to Interchile S.A., a subsidiary of Colombia state-owned ISA, one of Latin America’s largest power and telecom operators, according to the law firm Milbank, Tweed, Hadley & McCloy. The Interchile project is ISA’s first foray into the Chilean power market.
The financing will cover around 70% of the $1 billion cost associated with a transmission line project operated by Interchile called Cardones-Polpaico. On completion, the 500 kilovolt transmission line will service energy needs in the central and southern portions of Chile, as well as significant mining operations in the northern part of the country.
Milbank partner Dan Bartfeld, head of the firm’s global project finance group, led the financing deal team, and said, “Milbank is pleased to have worked on a number of concession-based transmission line financings throughout Latin America, including this very large and high-profile transaction. Chile’s electricity sector has been a model for the region in its embrace of private investment. Securing financing for the Cardones-Polpaico project is another step in assuring ample electric power for an expanding economy.”
The lender group was comprised of BBVA, The Bank of Tokyo-Mitsubishi UFJ Ltd., Sumitomo Mitsui Banking Corp., Natixis, Crédit Agricole and Banco del Estado de Chile. BBVA, Banco del Estado de Chile, and Chile’s Banco BICE are also providing Interchile with a nearly $68 million value-added tax facility. The project is expected to be operational by the end of 2017.