US$160 million financing for San Jacinto-Tizate phase II power generating facility in Nicaragua

Arias, Fábrega & Fábrega advised IFC, as administrative agent, in connection with the debt financing for the Phase II expansion of a nominal 36 MW (net) geothermal power generating facility to be developed and constructed by Polaris Energy Nicaragua, in the municipality of Telica, Department of León, Republic of Nicaragua.

The financing consists of US$140 million in senior construction and term loans and US$20 million in subordinated debt which is available for project contingencies and for general corporate purposes.

This is IFC's first investments in a vertically integrated geothermal power project.

The consortium of lenders includes IFC, the Inter-American Development Bank, Central American Bank for Economic Integration, Deutsche Investitions- und Entwicklungsgesellschaft mbH, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V., Oesterreichische Entwicklungsbank AG and Societe de Promotion et Participation pour la Cooperation Economique.

The borrowers are Polaris Energy Nicaragua, S.A., a Nicaraguan company, and San Jacinto Power International Corporation, a Panamanian company and 99.9% owner of Polaris Energy Nicaragua.

The project, currently one of the largest greenfield geothermal construction projects in Central America, will promote the development of renewable energy, expand electrification, and help reduce the country's dependence on imported oil.

About IFC
The IFC is the largest global development institution focused on the private sector in developing countries. The institution provides financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development.