Financing a Large Hydropower Portfolio in Panama

The government of Panama sold controlling shareholdings in four generation companies through a competitive international bid. A subsidiary of The AES Corporation offered a winning bid of $91.7 million for 49% interests in two of the generation companies. The AES Corporation also received a concession to build, own, and operate the 120-MW Esti power plant, a greenfield hydropower station in western Panama. Delphos arranged $334 million in long-term, limited-recourse financing for AES Panama, representing approximately 85% of the expansion costs. The financing allowed the building of the Esti Project, the upgrade of the Bayano asset, and the refinancing of a $275 million construction facility that Delphos also played an integral role in arranging. The facilities were provided by the International Finance Corporation (“IFC”) under an A/B loan structure, Credit Suisse First Boston (“CSFB”), acting as a private placement agent for the IFC B loan, and EKN, the Swedish export import bank. The financing received a preliminary investment grade rating from Fitch of BBB-, piercing the sovereign debt ceiling of Panama. Delphos assisted AES Changuinola with the financing of a 223 MW hydroelectric facility with average energy generation of approximately 1,047 GWh. AES Panama was awarded a PPA for in September 2006, following a competitive bid, by two Panamanian distribution companies owned by Union Fenosa of Spain. The PPA has a term of 10 years starting in January 2010. In turn, AES Panama, the largest electric generation company in the country, agreed to terms like those in the PPA in an off-take contract with AES Changuinola. It is estimated that the project will cost an estimated $562 million. Delphos assisted AES Changuinola in raising approximately $366 million in senior loans from local banks and arranged by Banco Continental de Panama. The financing closed in mid-2007. The project will address the need for new hydropower capacity in the country and will help reduce Panama’s reliance on expensive imported oil. Based on its technical and other characteristics, the project is expected to be very competitive in Panama’s liberalized mixed spot and contracting market.



  • Renewables & Power

Client Name

AES Panama

Services Provided

  • Capital Raising


  • Latin America & the Caribbean


  • Panama