Panama Canal announces expansion financing structure
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(seatradeasia-online.com ) Panama City: The Panama Canal Authority (ACP) announced the $2.3Bn financing structure that will cover a portion of the $5.25Bn cost of its expansion programme that will build a third lane allowing the transit of post-Panamax vessels.ACP Administrator Alberto Aleman said that the ACP decided to accept the offers by five multilateral agencies for considering them "the best offers we received". The European Investment Bank (EIB) will provide $500M, Japan Bank for International Co-operation (JBIC), $800M, Inter-American Development Bank (IDB), $400M, International Finance Corporation (IFC), $300M and the Corporacion Andina de Fomento (CAF), $300M. "We are looking at an average interest rate of 5.49% with a 20-year amortising period including a 10-year grace period", said Aleman. The Canal plans to cover the rest of the financing with its cash flow.
Aleman said [that the ACP] "has not made a decision yet" whether they would announce a further toll increase next year. The last toll increase took place in 2006 extending the 30% increase over a period of 3 years.
"We are confident that this financing package will provide the financial backing the ACP need for the expansion programme," said Aleman. "This signifies complete trust and confidence in the solid financials and management of the ACP and the strength of the Panamanian economy," he added. The participation of the multilateral agencies shows their confidence in a well structured project and the importance of the Canal in the world economy and global trade, said Aleman.
Recently, the ACP received its first-ever prospecting investment grade rating by Moody's Investors Services which gave the ACP an A1 as government-related issuer and a prospective A2 investment grade for the possible$2.3Bn financing for the expansion project.
