US$1bn has been raised for the Cochrane power plant in Chile.

The transaction was closed at the end of March and is virtually a repeat of the Angamos transaction of 2009, which shared the same sponsors – AES and Mitsubishi.

The Japan Bank for International Co-operation (JBIC) provided a direct loan of US$500mn. The remaining US$500mn was contributed by Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ (BTMU), Sumitomo Mitsui Banking Corporation (SMBC), HSBC and the Korea Finance Corporation.

The commercial portion is jointly covered by Nippon Export and Investment Insurance (Nexi) and the Korea Trade Insurance Corporation (K-Sure). While each of the commercial banks has contributed US$100mn, there is an “asymmetric calibration” between Nexi and K-Sure coverage.

The finance has a 14-year tenor, with a 2.5-year grace period for construction. Pricing remains confidential.

Rafael Cervantes, vice-president of export agency finance for SMBC, tells GTR that the project is “fully contracted, with three strong offtakers”. The coal-fired plant will have a net capacity of 472MW and the electricity will be sold for domestic purposes.

“The electricity is all for domestic use,” says Cervantes. “Chile requires vast amounts of energy, so there’s no need to export. I don’t think anybody’s exporting energy from Chile these days.”

He expects further energy transactions in Chile to be announced shortly, with a gas-fired plant in the south of the country believed to be in the bidding process, with BHP Billiton already confirmed as the offtaker. Furthermore, SMBC is set to be involved in a number of solar projects in northern Chile this year.