EMPRESA DE DISTRIBUCION ELECTRICA C (FMO-58215)

Regions
  • Latin America and Caribbean
Where the impacts of the investment may be experienced.
Countries
  • Panama
Where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Borrower
EDEMET-EDECHI
The holder of the loan, grant, or other investment.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 120.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ FMO website

Updated in EWS Oct 14, 2020

Disclosed by Bank Jun 29, 2020


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Project Description

Clients are two electricity distribution companies in Panama: Empresa de Distribucion Electrica Metro-Oeste, S.A. ("EDEMET") and Empresa de Distribucion Electrica Chiriqui S.A. ("EDECHI"). EDEMET and EDECHI ("Naturgy Panama" or "the Companies") have more than 600,000 residential clients and account for 62.67% of total electricity sales in Panama. The loan will be allocated US$80 million to EDEMET and US$40 million to EDECHI, for a total of US$120 million. The Companies are controlled, and majority owned by Naturgy. The companies are regulated utility companies.

The transaction consists of a senior loan with a term of 30 months (the "Transaction"). The purpose of the Transaction is to provide working capital to the Companies to compensate for the lack of liquidity resulting from the deferral of electricity bills during the four-month moratorium approved by the Government of Panama (Law 152 of May 4, 2020) intended to help end-users affected by the economic crisis caused by the global coronavirus (Covid-19) pandemic. The beneficiaries of this Transaction will be the Companies' end users.

The bank has categorized this transaction E&S B, as these are operational companies which conduct electricity distribution activities with relatively limited environmental & social impacts. IFC Performance Standards (PS) 1 - 4 are triggered. Adequate environmental & social management systems are expected to be in place. PS 5 - 8 are expected to be not triggered as the companies' activities concern existing electricity distribution operations. This financing will not be used to make any capital investments.

Investment Description
  • Netherlands Development Finance Company (FMO)
Private Actors
  • Empresa de Distribución Eléctrica Chiriquí S.A. (EDECHI) -- Engineering and Construction Contract
  • Empresa de Distribución Eléctrica Metro-Oeste, S.A. (EDEMET) -- Engineering and Construction Contract
Contact Information

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW) . A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism