PANAMA REPORT: Canal Banks on Funds

Nov 1, 2008

Global evaporation of liquidity has put several large LatAm infrastructure projects on ice. The Panama canal says it can continue unhindered, with the help of multilaterals.

by Andrew Beatty

With capital markets reeling, the Panama Canal Authority (PCA) has turned to multilateral lenders to secure almost half the $5.25 billion it needs to double capacity of the 80 kilometer waterway. Five major lenders are working on joint terms to provide loans of more than $2.3 billion to pay for the creation of a third set of locks, the single biggest part of the venture.

Financing should be in place by the end of the year, when the engineering contract is also awarded to one of four consortia that include the world’s largest construction firms. According a the canal’s administrator Alberto Aleman, $800 million would come from JBIC, $500 million from the EIB, $400 million...

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