Second bank approves loan for Peru gas project

The U.S. Export-Import Bank, Ex-Im, approved a $250 million loan for the second phase of the Camisea gas project Friday, following the lead of the Inter-American Development Bank which brushed off environmental and social concerns by approving a $400 million loan.

The loan will partially fund a natural gas liquefaction plant and other infrastructure on the pacific coast that would turn Peru into an exporter of liquefied natural gas, with markets in Mexico and possibly Chile and the United States for regasification.

The $3.9 billion project, headed by Texas-based Hunt Oil, is expected to generate an average of $230 million a year in incremental royalties and $90 million in income tax revenue for the Peruvian government. It is one of Latin America’s key energy infrastructure projects.

In 2003, Ex-Im denied the Camisea a $200 million loan to finance the first phase of the energy project, a transportation component, citing environmental concerns. On Dec. 13, a delegation of human rights and environmental activists from Peru met with bank officials in Washington to persuade them that threats to the fragile jungle eco-system and its indigenous inhabitants still exist.

The World Bank is expected to announce its decision whether to finance the project in mid-January.

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