Chapter 3

TermoEmcali, Colombia

Type of project

Build-own-transfer, combined-cycle, gas-fired power plant.

Country

Colombia.

Distinctive features

• Infrastructure project generating local-currency revenues financed ‘out of the box’
  with bonds.


• First power project in Colombia financed through Rule 144A private placement.


• Longest-term bond issued to date for Colombian borrower.


• Bond issue backed by commercial loan commitment.


• No state guarantees or state-owned offtakers.


• Obligations of private offtakers guaranteed by pledge of receivables.


• Debt-service reserve and working capital account.

Description of financing

Senior secured notes in a principal amount of US$165 million with a 17-year maturity

were issued in 1997 under Rule 144A, underwritten by Bear Stearns. Project credit

facilities, underwritten by a group of commercial banks, led by Dresdner Kleinwort

Benson were:

• US$13.2 million, five-year debt-service reserve letter of credit with a fee of 2.5 per
  cent per year and a margin over the London interbank offered rate (Libor) of 2.75
  per cent per year;


• US$12.0 million working capital facility maturing no later than seven years from
  financial closing with a commitment fee of 0.5 per cent per year and a margin over
  Libor of 1.875 per cent per year; and


• US$15.5 million, five-year project contract letters of credit with a fee of 2 per cent
  per year a margin over Libor of 2.625 per cent per year and a commitment fee of
  0.5 per cent per year.
  If the credit rating for the project changes, there is a provision for the spread over Libor
  of the project credit facilities, defined as the applicable spread, to change accordingly.