IDB Invest structures $967m package to support the financial sustainability of Chile’s electricity sector
IDB Invest has structured a $967 million package of financial solutions to provide liquidity to 15 electricity generators in Chile that are subject to a law on tariff stability.
The package is made up of two deals, one with Goldman Sachs, and another with BNP Paribas and Banco Santander, to serve two different groups of generators.
The liquidity solution consists in that IDB Invest will acquire the credit rights (accounts receivables) that the National Energy Commission has recognized from the generators, as compensation for the freezing of tariffs in pesos, after the implementation of Law 21.185. To monetize these credit rights in the short term, IDB Invest has structured two operations that will allow it to mobilize resources through international investment banking partners.
In the second deal, IDB Invest will acquire the credit rights of eight generating companies valued at $196 million, which will be brought at present value to generate monetization. IDB Invest will retain a 33% tranche, while the remaining amount is financed in equal parts by BNP Paribas and Banco Santander. The beneficiaries of this transaction will be eight generators: Aela Generación, Cerro Dominador CSP, Chungungo, Empresa Eléctrica Carén, GM Holdings, Norvind, San Juan and Santiago Solar.