Renewables companies get US$335 million loan for Colombian projects

24 September 2020

Skadden, Arps, Slate, Meagher & Flom LLP in New York and Mendoza Abogados in Bogotá have helped the investment vehicle of Colombian renewables company Celsia and British counterpart Cubico obtain a US$335 million financing to acquire and develop power transmission projects in Colombia.

Milbank in New York and Colombia’s Brigard Urrutia advised the lenders, Scotiabank and Export Development Canada. The collateral agent, Colpatria, turned to a different Brigard Urrutia team for advice.

The loan’s first disbursement was made on 21 August.

Cubico and Celsia’s jointly owned investment group, Caoba Inversiones, is receiving the loan across two portions, split between US dollars and Colombian pesos. The first portion is worth US$275 million, while the second amounts to 226 million Colombian pesos (US$65 million).

The transaction is understood to be one of the first where a project financing and an acquisition financing have been structured under the same loan agreement in Colombia. The details of how much of the funds will be allocated to asset purchases and infrastructure projects, respectively, were not revealed.

The renewables companies will use the loan to purchase power facilities in the country’s central Tolima department, where they will also invest in the area’s national grid operations. Tolima’s transmission network serves around 1 million residents.

Celsia and Cubico will also use the money to develop a 220-kilovolt substation and 160 kilometres of transmission lines, spanning three departments in the north of the country: Bolívar, Córdoba and Sucre. That project, called Toluviejo, is expected to create around 1,500 jobs.

Caoba Inversiones was created in 2019 by Cubico and Celsia as an investment vehicle for power and infrastructure projects in Colombia. Celsia holds a 51% interest in the investment vehicle, while Cubico holds the remainder. In a separate project, the two companies joined forces last year to develop Colombia’s largest solar park, with a planned installed capacity of up to 400 megawatts.

Cubico is a renewables investor, owned by two of Canada’s largest pension funds, the Ontario Teachers’ Plan and PSP Investments. It has power assets across 13 countries, including Latin American operations in Brazil, Colombia, Mexico and Uruguay.

Celsia is a subsidiary of Colombian conglomerate Grupo Argos. It holds 28 solar, thermal, wind and hydroelectric power plants across Colombia, Costa Rica, Honduras and Panama.

US infrastructure investor Glenfarne Group purchased two thermal power plants from Celsia late last year.

Counsel to Celsia, Cubico and Caoba Inversiones

In-house counsel to Celsia and Caoba Inversiones – Verónica Toro

Skadden, Arps, Slate, Meagher & Flom LLP

Partner Alejandro Lazzeri and associate Jose Perez-Sierra in New York

Mendoza Abogados

Partner Mateo Mendoza and associates María Beatriz Segura, Mariana Gutiérrez, María Elvira Borrero, Juan Pablo Rico, Luis Armando Tolosa, Daniel Taboada and María Alejandra Noriega in Bogotá

Counsel to Scotiabank and Export Development

In-house counsel to Scotiabank – Olga Lucía Varón and Camila Arango

Milbank

Partners Carlos Albarracin and Jaime Ramirez, and associates Ana Bueno, Juan Pablo Aspe and Daniel Rios Zertuche in New York

Brigard Urrutia

Partner César Rodríguez and associates Santiago Jaramillo Martínez, Juan Pablo Tello Martínez and Carolina Flórez Rey in Bogotá

Counsel to Fiduciaria Colpatria

Brigard Urrutia

Partner Carlos Urrutia and associates Maria José Aya Clavijo and Sebastián Luque Charry in Bogotá

Source: LatinLawyer

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