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Financing secured for LNG-to-power project in El Salvador

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LNG Industry,

Energía del Pacífico (EDP) has announced completion of project financing for the LNG-to-power project currently under construction at the Port of Acajutla, El Salvador. The transformative infrastructure project brings approximately US$1 billion foreign direct investment (FDI) for the Central American nation, making it the largest private investment ever in the country.

The project is comprised of a 378 MW natural gas-fired power plant, a floating storage regasification unit (FSRU), and an approximately 44 km electric transmission line that will connect to the Central American Electrical Interconnection System, strengthening the country’s electric grid. The project is scheduled to be operational by the end of 2021.

EDP will introduce a new source of thermal generation to El Salvador through power purchase agreements with seven of the country’s distribution companies. The plant’s use of natural gas will reduce the amount of imported diesel and heavy fuel oil fired generation in El Salvador’s electricity mix, resulting in significant environmental benefits for the country and the region.

US-based Invenergy developed EDP in partnership with El Salvador-based partners Grupo Calleja, VC Energy de Centroamerica and Quantum Energy.

“Energía del Pacífico is a transformational project for El Salvador and the entire region – a shining example of the enormous opportunity that can be created, despite prior obstacles, when private initiatives have strong government support,” said Michael Polsky, Invenergy Founder and Chief Executive Officer. “Leveraging our decades of development, engineering, finance, construction and operating experience, Invenergy is uniquely positioned to lead this partnership and execute this complex project.”

EDP and Shell have executed a long-term agreement for supply of LNG for the project. In partnership with BW LNG and BW Offshore, LNG will be converted to natural gas on an FSRU that will be permanently moored offshore. Saam Towage will provide tug support services for the project. LNG delivered to the FSRU will be regasified and transported from the FSRU to the power plant through a sub-sea pipeline to be engineered and constructed by maritime infrastructure contractor Boskalis.

Clean, reliable power will be generated by Wärtsilä internal combustion engines running on natural gas and a steam turbine generator. Elecnor will engineer and construct the 230 kV double-circuit transmission line and associated substations.

Leading global financial institutions Overseas Private Investment Corporation, International Finance Corporation, IDB Invest, Finnish Export Credit Ltd and KfW IPEX-Bank are lenders to the project. White & Case served as transaction counsel, Arias as Salvadoran counsel and Astris Finance acted as financial advisor for EDP.

The US Ambassador to El Salvador, Ronald Johnson, said, “The Energía del Pacífico project represents a significant investment in El Salvador’s energy future. With Invenergy as a leading partner and financing from OPIC, EDP is the kind of private sector-driven infrastructure investment the United States’ America Crece initiative will promote throughout the region.”

80 full-time, high-quality permanent jobs will be created to operate and maintain the power plant, FSRU and accompanying infrastructure. Furthermore, EDP will require more than 1000 workers to build the project.

EDP will contribute millions of dollars to economic and social projects in Acajutla and the surrounding region over the life of the project. As part of its social commitment, EDP has already provided electricity for the first time to El Salvador farms and families and upgraded the school in Acajutla in addition to improving road, sewer and water infrastructure.

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