Garrigues advises Metro de Lima on financing for Line 2 of Lima metro for 961m

Garrigues Peru has assisted Metro de Lima in a $961 million USD financing and credit facility for the Lima Metro Line 2 project

 Garrigues has advised Metro de Lima Línea 2 on a set of financing packages for the Lima Metro Line 2 project, for a total amount of $961 million US dollars. These packages consisted of an $811 million off-balance sheet financing from the Export Credit Agency, as well as a $150 million revolving construction credit facility.

The ECA-backed credit line was covered by an export credit guarantee provided by SACE, the Italian Export Credit Agency. The loan was granted by a group of European banks to a special purpose vehicle, which will purchase the RPI-CAO from Metro de Lima using the funds disbursed by the lenders. The credit facility is one of the only RPI-CAO export credit financings and is the largest RPI-CAO transaction ever financed under a loan format in Peru. This transaction was closed on 30 July for $811 million.

The construction revolving credit facility, on the other hand, consisted of an amendment and restatement of an existing credit facility signed in 2019, which was restructured and extended by the parties. The funds will be disbursed by the Lenders to the Borrower once the Borrower reaches certain construction milestones under the Lima Metro Line 2 project, the repayment of which is backed by payments to be made by the Peruvian Ministry of Transport and Communications. This operation had a value of $150 million and was closed on 27 July.

Latham & Watkins, Norton Rose Fulbright, Rodrigo, Elías & Medrano Abogados and Estudio Echecopar also advised on the transaction.

Oscar Arrus, partner at Garrigues, commented: “Like most project finance structures, it has certainly been a challenge to close both transactions simultaneously. They were full of interesting complexities that will allow the project company to diversify its financing mix.

“These transactions reaffirm the strength and recognition of Peruvian PPP projects, highlighting the support of Lima Metro Line 2 by international lenders. The fact that both transactions closed days after the inauguration of Peru’s newly elected president demonstrates that this and other projects in the country will continue to move forward,” said partner Diego Harman.

Lima Metro Line 2 is one of the most ambitious infrastructure projects launched in Latin America under a PPP structure. Under the 35-year concession agreement, 35 km of metro lines will be built with a total investment of approximately US$5.5 billion.

Garrigues’ team was led by partners Oscar Arrús (pictured top left) and Diego Harman (pictured right), assisted by senior associate Miluska Gutiérrez (pictured bottom left) and associate Isabella Barba.

Latham & Watkins was comprised by partner Gianluca Bacchiocchi and associates Alejandro Espitia, Fernando Castillo and Andrew Turk.

Norton Rose Fulbright’s team consisted of partners Daniel Spencer, Kim Caine, Kenneth Hansen, Arturo Sferruzza, Bart Le Blanc, together with counsel José Cobeña and associates Cameron Dumans Royse and Frances Hoogenberg.

Rodrigo, Elías & Medrano Abogados team included partners Fernando Molina and Efraín Salazar and associate Ana Sofía Restrepo.

Estudio Echecopar’s team was supported by partner Juan Carlos De Los Heros and associate Fernando Sam.