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GIP Lends USD175m to Finance the Construction of a Gas-Fired Power Plant in Panama

11 January 2022

Global Infrastructure Partners (GIP) invested USD175m in the form of a senior secured term loan in Group Energy Gas Panama to finance the acquisition and construction of a 670 MW gas-fired power plant in Panama.

(Global Infrastructure Partners) Global Infrastructure Partners (GIP), together with its co-investors, today announced that it has made a Senior Secured Term Loan investment of $175 million in Group Energy Gas Panama S de RL (Borrower), to finance the acquisition and construction of Generadora de Gatun (Gatun), the owner of a 670 MW natural gas cogeneration power plant to be constructed in Colon, Panama. Once constructed, Gatun is expected to be the largest and most efficient Combined Cycle Gas Turbine (CCGT) power plant in the country. Gatun is designed to improve electric reliability by diversifying electricity sources for the nation’s power grid.

GIP is making the investment through Global Infrastructure Partners Capital Solutions Fund II (GIP CAPS II), part of GIP’s Credit platform (GIP Credit). The investment in Gatun represents the third commitment made by GIP CAPS II. The CAPS strategy provides customized credit financings for infrastructure issuers in GIP’s core sectors of midstream energy, power, renewables, energy transition, digital, transportation and water/waste, while leveraging GIP’s significant operating expertise.

Group Energy Gas Panama S de RL, is a newly formed joint venture between InterEnergy and The AES Corporation, two of the largest private investors in the Panamanian power and energy market. Proceeds from the investment, in conjunction with proceeds from senior debt at the Gatun level and equity contributed by the sponsors, will be used to fund over $1.0 billion of estimated acquisition and construction costs of the project.

InterEnergy has been developing power projects in the Caribbean and Latin America for over 30 years and is the third largest power generation company in Panama. The AES Corporation has been in Panama since 1999 and currently owns and operates over 1,100 MW through three subsidiaries, AES Panamá, AES Changuinola and AES Colon.

Steve Cheng, Credit Partner at GIP, said: “We are very pleased to have entered into this transaction with Gatun and its highly experienced sponsors, AES Panama and InterEnergy. The Gatun power plant is well positioned to meet growing industrial power demand in Panama and is expected to play a key role providing stability to Panama’s electric grid considering the significant renewable generation sources already in place. The transaction is in line with GIP Credit’s strategy of investing in critical infrastructure with strong sponsorship.”