First Time For Ex-Im Bank To Cover Construction Phase of Project
FOR IMMEDIATE RELEASE November 3, 1999
Marianna Ohe (202) 565-3200
The Export-Import Bank of the United States (Ex-Im Bank) is providing a $180 million loan guarantee to finance the export of equipment and services by Siemens Corp., New York, NY, and numerous US suppliers to expand and modernize Mexico's Madero Refinery. This is the first time Ex-Im Bank has covered commercial risks during the construction phase of a project finance transaction. Until now Ex-Im Bank had financed only the post-construction or operational phase of projects under the Project Finance program. ABN Amro North America, Inc., Chicago, IL, is the guaranteed lender.
Ex-Im Bank expanded its Project Finance program to include coverage of construction risk following the Asian economic crisis when commercial markets pulled back from project construction financing, said Ex-Im Bank Chairman James A. Harmon. We believe this product will help fill financing gaps and enable US exporters to remain competitive in infrastructure projects in emerging markets.
The Madero modernization will substantially reduce air and liquid emissions and surface water consumption at the refinery. It also will satisfy growing regional demand for unleaded gasoline to meet Mexican environmental regulations, assist Mexico's electric utilities in shifting consumption from high sulfur fuel oil to natural gas, increase light fuel production while reducing heavy fuel oil production, and expand refining capacity.
The project company is Pemopro, a Mexican joint venture of project sponsors SK Engineering & Construction Co., Ltd., South Korea; Siemens AG, Germany; and Mexico's Grupo Tribasa, A.A. de C.V. Pemex Refinacion, a subsidiary of Mexico's national oil company Pemex (Petroleos Mexicanos), awarded the contract to Pemopro. Pemex will assume the Ex-Im Bank-supported debt upon contract termination or satisfactory project completion.
Ex-Im Bank is an independent US government agency that assists in financing the export of US goods and services to developing markets around the world. Worldwide in fiscal year 1999, Ex-Im Bank supported nearly $17 billion of US exports.