34588 - Acajutla LNG

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Summary of Investment Information

Project Number

34588

Company Name

ENERGIA DEL PACIFICO S.A. DE C.V.

Date SPI Disclosed

Aug 1, 2018

Country

El Salvador

Region

Latin America and the Caribbean

Projected Board Date

Dec 14, 2018

Environmental Category

A - Significant

Status

Active

Last Updated Date

Jun 12, 2021

Department

Regional Industry - INF LAC

Industry

Infrastructure

Previous Events

Approved : Jun 6, 2019
Signed : Nov 20, 2019
Invested : Dec 20, 2019

Sector

Gas - Thermal Power Generation

Additional Project Attributes

Public-Private Partnerships

Project Description

The Acajutla LNG project (“Acajutla LNG” or the “Project”) involves the construction, operation and maintenance of (i) a 378 MW gas-fired power plant that will run on natural gas, and (ii) an offshore liquified natural gas (“LNG”) import terminal, which will include a dedicated, permanently moored, floating storage regasification unit (“FSRU”) that will deliver gas to the power plant via an approximate 1.3 km subsea natural gas pipeline and a 500-meter onshore underground pipeline. The Project also includes the construction of an approximate 44 km, 230 kV transmission line connecting the power plant to the Ahuachapan substation and a 0.4 km, 115 kV transmission line connecting the power plant to the Acajutla substation. The power plant and the FSRU will be located within an existing port and industrial area, secured under a 24-year lease agreement with the Executive Commission of the Port of Acajutla (CEPA), who owns and manages the port.

To achieve its goals of increased electricity generation and reduction in overall electricity prices, in 2012, the Government of El Salvador launched a tender process for the supply of up to 355MW of new generation capacity to be allocated across seven private distribution companies for a period of 20 years. EDP won the tender with a 378 MW gas-fired base-load power plant and signed a 20-year Power Purchase Agreement at the end of 2013.

Associated Advisory Engagement

- Sargent & Lundy Consulting (Lenders’ Engineer)

- INDECS Consulting Limited (Insurance Consultant)

- PSR-INC Energy Consulting (Market Consultant)

- Norton Rose Fulbright US LLP (New York Counsel)

- Romero Pineda Asociados (El Salvador Counsel)

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management	3.0
Guarantee
Loan	85.0
Equity

Development Impact

The Project is expected to: (i) lower El Salvador's dependency on imported oil; (ii) complement the introduction of renewable power into the system, (iii) provide energy security to foster long-term sustainable economic growth in the country; (iv) reduce greenhouse gas emissions; (v) reduce electricity prices which will increase competitiveness of the country's various industries including manufacturing and services; (vi) contribute to the El Salvador's economy through tax contributions and job creation; and (vii) create a regional gas hub to potentially enable the introduction of natural gas for industrial and transport clients, while also diversifying away from other more carbon intensive fuel sources.

IFC will provide financial additionality through long term debt financing and mobilization of funds tailored to fit the cash flow needs of the Project. Local and regional commercial banks have shown no appetite for long tenors required by the Project. IFC's role in providing required credit enhancement for the introduction of LNG into El Salvador is critical to ensure the development of a lower-carbon power sector in the country and in the region. The introduction of LNG into Central America involves technical and financial complexities especially within a non-recourse project finance structure. Through its involvement in three other LNG-to-Power projects in Latin and Central America, IFC will play a catalytic role in ensuring the bankability of the power offtake arrangements, financial structuring of the project and mobilizing other lenders. IFCs Social and Environmental Sustainability Policy will set key benchmarks for the Project, taking into account the experience in other LNG-to-Power projects, further helping in mainstreaming the implementation of such projects across emerging markets. IFC is also expected to work with the sponsors on the Project's long-term Corporate Social Responsibility plan in Acajutla.

E&S Category Rationale / Risks and Mitigation

Key E&S impacts potentially associated with this project include air emissions, environmental noise, construction related E&S impacts, land and marine biodiversity, GHG emissions, impacts to fishers, land acquisition, security management, labor and community related impacts and health and safety risks during construction and operation. The proposed project is Category A per IFC’s Environmental and Social Sustainability Policy.

Contacts

For Inquiries About the Project, Contact

Energía del Pacifico Ltda. de C.V.
Alejandro Alle
In-Country Director
+503 2133-0700
aalle@edp.com.sv
Edificio Avante, Oficina 709, Calle Llama del Bosque, Urb. Madreselva III Etapa, Antiguo Cuscatlán, La Libertad, El Salvador, C.A.
http://www.energiadelpacifico.com/

For Inquiries and Comments About IFC, Contact

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IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

http://www.energiadelpacifico.com/

Edificio Avante, Oficina 709

Calle Llama del Bosque, Urb. Madreselva III Etapa

Antiguo Cuscatlán, La Libertad

El Salvador, C.A.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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