IFC Provides Financing to Peru’s Oil and Gas Industry Amid Global Credit Crisis
Washington, D.C./Lima — IFC, a member of the World Bank Group, has disbursed a $15 million loan to BPZ Exploración y Producción SRL, supporting a growing Latin American oil and gas company in making use of Peru’s natural resources during a time of tight credit markets.
BPZ Exploración y Producción is a Peruvian subsidiary of BPZ Resources, Inc. As the global financial crisis has made raising money difficult for the private sector in developing countries, IFC has disbursed a four-year revolving senior debt facility and is working with commercial banks to add $200 million under the same terms.
“Our partnership with IFC is a driving factor in the future success of the company,” said Manolo Zúñiga, BPZ’s President and CEO. “As the credit markets have dried up, IFC has stood alongside BPZ as a strong partner. BPZ has always been confident in IFC’s ability to deliver in a tough market.”
The loans will support BPZ’s drilling program in offshore Block Z-1’s Corvina oil and gas field and the start-up of its Nueva Esperanza power plant, which will be fired with gas supplied from the Corvina field. IFC’s loan complements previous equity investments worth $39 million.
“We have built a long-term partnership with BPZ to support the supply of local fuels as well as clean gas-fired electric power”, said Somit Varma, Director and Global Head of IFC’s Oil, Gas, Mining and Chemicals Department. “IFC is supporting its strategic clients that make a difference for the local communities in the regions where they operate.”
BPZ’s operations in northwestern Peru will generate significant royalties and income taxes to the country and benefit local people by providing jobs and extensive social programs, including training programs for local workers, micro enterprise development and health programs. In addition, IFC is helping BPZ to strengthen the regional government’s capacity to spend its revenues on development programs.
“With the help of IFC’s financing, we are in the position to accelerate our investments in Peru, which began to generate cash returns in December last year,” Zúñiga said. “With IFC’s presence, we are now in the process of adding commercial bank funding in times of significant turmoil in the international capital markets. In addition, we are very pleased with IFC’s input into our environmental and social management plans and community programs.”
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.
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