IFC helps Argentina meet energy needs with $378 million in long term loans to Axion Energy
IFC, a member of the World Bank Group, signed a $378 million financing package with Axion Energy Argentina S.A. (“Axion”) to help the company expand and upgrade its oil refining capacity and promote Argentina’s transition toward more stringent and environmentally friendly fuel standards. The financing package consists of an eight-year $78 million loan from IFC and a $300 million loan raised by IFC from several commercial banks and other financial institutions including ICBC, Santander, BBVA, Crédit Agricole and Citibank,with tenors ranging from 5 to 6 years. This financing marks the return to Argentina’s financial markets of long-term syndicated loans from IFC in tenors beyond 5 years.
IFC’s financing will be used for the expansion of Axion’s refinery, located in Campana, Argentina, which will increase its production of refined products, including ultra-low sulfur diesel; reduce its sulfur emissions; and increase access to cleaner fuels by expanding its distribution network. This increased supply will help reduce Argentina’s reliance on imported fuels and expand availability of efficient and cleaner burning types contributing to better air quality. This investment is aligned with the World Bank Group’s country partnership strategy for Argentina, which emphasizes the need to foster private investment and strengthen the competitiveness of the country’s private sector, as well as needs for reducing environmental risks and increasing domestic value addition.
”This long term loan is a very important financing source in addition to the investment of more than $600 million that Axion has carried out since 2013. Axion will go on with this strategic expansion aimed to produce clean fuels with the highest quality standards,” said Adrián Suarez, Axion’s CEO. “Axion’s upgrades and expansion will help Argentina meet its growing energy demands in a more sustainable manner,” said Alzbeta Klein, IFC’s Director for Manufacturing, Agribusiness and Services. “The mobilization of long-term funding from international banks not only demonstrates Axion’s strong profile in the market, but also demonstrates potential for additional private investment in Argentina.”
IFC promotes access to affordable, reliable and sustainable energy because it is vital to driving economic growth and ending extreme poverty. In addition to working with companies to produce cleaner energy solutions, IFC is also one of the world’s largest investor in renewable energy, with investments now totaling more than $1.0 billion annually and growing at a 20 percent rate. In Argentina, IFC has committed over $1.3 billion in sustainable private sector projects over the past twelve months, becoming the largest international source of financing to the country’s private sector during this period. IFC’s strategy in Argentina is focused on financing projects with significant development impact for spurring economic growth, innovation and job creation. Priority sectors include agribusiness, infrastructure and renewable energy; competitive manufacturing; strengthening long-term financing for companies, including small and medium enterprises (SMEs); and helping improve investment climate for business start-ups and SME growth.