International Water Services (Guayaquil) Cia. Ltda.’s $70 Million Loan

Flor & Hurtado and Jones Day advised on the transaction

Intergua secured a $70 Million Loan from IDB Invest.

Intergua was awarded in April 2001 a 30-year concession to operate, maintain, and build upgrades for the Guayaquil water, sewer, and drainage systems. The company serves approximately 2.6 million people. After 15 years of concession the potable water system now covers approximately 90% of the population with 24-hour uninterrupted service while wastewater system covers around 71% of the population.

The company is owned by Veolia (France) through Proactiva Medio Ambiente (Spain), Hidalgo e Hidalgo (Ecuador), Fanalca (Colombia) and Equivia (Ecuador). Veolia is a world leading provider of water, waste management and energy services, with presence in 48 countries.

Proceeds of the long term financing will cover a portion the current 5-year investment program and refinance part of existing short-term and subordinated debt.

Interagua’s investment program is targeted to maintain and improve service quality of the existing networks and plants, execute rehabilitation projects, install new potable water and wastewater connections, as well as improve and maintain the rain/storm water management infrastructure.

Further commitments include achieving specific service targets related to water pressure, continuity of service, water supply, drinking water and wastewater quality standards.

The total 5-year investment will be approximately USD 470 Million, of which 23% is financed by Interagua and 77% by third party funds (including allocation of the national budget to the municipality, municipal taxes, and loans to the municipality, among other funds).

Flor & Hurtado advised IDB Invest with a team including Mario Flor (Picture), Daisy Ramirez and Alejandro Perez.

Jones Day advised IDB Invest with a team including Fradyn Suarez and Jessica Mendoza.

Involved fees earner: Mario Flor – Flor & Hurtado; Alejandro Pérez Arellano – Flor & Hurtado; Daisy Ramirez – Flor & Hurtado; Jessica Mendoza – Jones Day; Fradyn Suárez – Jones Day;

Law Firms: Flor & Hurtado; Jones Day;

Clients: IDB Invest;

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Author: Ambrogio Visconti.