In October 2017, IFU signed a loan agreement with APM Terminals for the expansion of existing port facilities in the largest port of the South American Pacific coast, Port of Callao, near Lima, Peru. The port handles containers, grain and bulk storage, general cargo and specialized fuels and mineral transport.
– This project will have a great development impact in terms of the overall handling and warehousing capacity of the Callao Port – and also in terms of safety by updating to state-of-the-art equipment, said Frederik Zeuthen, Regional Director, Latin America.
USD 800m expansion
In 2011, a consortium which includes APM Terminals, won a 30-year concession for the Terminal Multiproposito Norte, including a five-stage investment and development plan, which is expected to reach USD 800m. The first two stages have been finalized resulting in an increased capacity from 0.4 to 1.1m twenty-foot equivalent units (TEU) and a general upgrade of piers and new equipment.
The IFU loan is part of the financing for the third stage expansion that consists of a grain storage warehouse, a bulk and fertilizer warehouse, general cargo equipment and refurbishment of a fuel-loading pier in order to fully utilize the capacity of the port and fulfil all requirements under their concession agreement with the Peruvian state.
Cost savings and higher volume
The loan will through these investments help APM Terminals Callao achieve considerable cost-savings in the operations and prepare the port for taking even higher volumes, which is becoming especially important as APM Terminals’ merger with shipping company Hamburg Süd is drawing to a close, which could add another 2-300,000 TEUs to the annual throughflow.
– Callao is a good opportunity for IFU to invest with APM Terminals in Latin America, which as a region will see further port expansions and other related projects and opportunities in the years to come as the A.P. Møller-Mærsk Group seeks to further consolidate its presence, said Frederik Zeuthen.
The IFU loan of USD 11.3m – in a parallel lending structure alongside an FMO loan of USD 22.8m – was syndicated by the IFC, who is also senior lender to APM Terminals Callao.