Loan Approved for $1.6-Billion Peru Natural Gas Project

Workers on portion of
Camisea pipeline, near Pisco, Peru (Photo courtesy of Inter-American Development Bank)

A controversial $1.6-billion natural gas project in Peru has received a financial boost from the Inter-American Development Bank, which approved $135 million in loans for the pipeline portion of the job.

The IDB's board of executive directors cleared the financial aid for the Camisea project on Sept. 10, but the board member from the U.S., Jose A. Fourquet, abstained. Fourquet cited several reasons for his abstention, including "indications that private financing may be available on favorable terms, " and that the U.S. has "not been able to allay doubts about the adequacy of the environmental assessment conducted for the project."

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Environmental groups have opposed the Camisea project, which is under construction, contending it would harm the Amazon forest, as well as a reserve for indigenous people and another reserve for marine life.

The financing approved by the IDB includes a $75-million loan from its capital for up to 14 years and a $60-million syndicated loan that would include participation by private banks for a term of up to 12 years.

The loans will help finance a 714-km-long natural gas pipeline and a 540-km-long natural gas liquids pipeline, whose total cost is $811 million. They will run from the Camisea field, which is 431 km east of Lima, to the Pacific coast.

On Aug. 28, the U.S. Export-Import Bank rejected an application for a $214.6-million loan guarantee for the Camisea project.

C.J. Schexnayder is the Editor of ENR West. He has contributed to ENR's coverage of the construction industry for more than a decade. His work has focused on major projects, industry trends and emerging technology. He previously was the South America correspondent for the magazine based in Lima, Peru. During that time, he covered numerous large-scale infrastructure projects across the region including the Third Lane Expansion of the Panama Canal. In addition, CJ has been an award-winning newspaper reporter in Southern California, Texas and Louisiana.

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