IFC to assist Peru LNG in associated community development programs
The International Finance Corp. has agreed to help a consortium developing Latin America's first liquefied natural gas export project run associated community development programs, the World Bank division said on Jan. 29.
The Peru LNG project will be a natural gas liquefaction plant and marine loading terminal 170 miles south of Lima on Peru's central coast as well as a new 408-kilometer pipeline which will connect to an existing pipeline network east of the Andes Mountains, IFC said.
Hunt Oil Co. of Dallas holds a majority interest, according to information at the project's website. SK Energy Co. Ltd. of South Korea, Repsol YPF SA of Spain and Marubeni Corp. of Japan have minority interests. The $3.8 billion project is the largest direct foreign investment in Peru's history, its sponsors said.
IFC said that under the agreement, it will help Peru LNG run three community development initiatives. The first is aimed at increasing income and employment in communities near the liquefaction plant. It will help small and medium businesses in Chincha and Canete supply food, transportation, uniforms, maintenance and other services to the project and local businesses.
The World Bank unit also will advise Peru LNG on international best practices for its community participatory monitoring program, which will give area communities an opportunity to evaluate the consortium's environmental and social performance. IFC will also help Peru LNG support local governments in Huamanga, La Mar and Huaytara by helping them manage, plan and allocate revenues, leading to a more efficient investment of royalties, it said.
IFC said that it joined other multilateral banks and commercial banks last year in a $300 million loan supporting the project, which is expected to make Peru a net gas exporter and generate tax and incremental royalty payments equal to more than 1.5% of the country's federal revenues after operations begin in 2010.
Contact Nick Snow at [email protected]