Infrastructure financing is a critical contributor to Latin American and Caribbean economic growth and development and Scotiabank demonstrated the heft of its offering with numerous accolades in the LatinFinance Project and Infrastructure Finance Awards 2022. These awards analyze the leading transactions and recognize institutions helping to drive regional economic progress in the Latin America and Caribbean region.
Scotiabank’s Global Banking and Markets division distinguished itself on behalf of its clients, in high-profile categories including Infrastructure Bank of the Year and Infrastructure Financing of the Year – Caribbean; Renewable Energy Financing of the Year; Loan of the Year; and Digital Infrastructure and Telecoms Financing of the Year.
“Infrastructure investment is a core engine that helps advance emerging markets and accelerate economic and social development for this region’s communities,” explained Marc Chouchani, Managing Director & Head, Power and Infrastructure Finance, Latin America & Caribbean at Scotiabank. The Inter-American Development Bank has estimated that annual spending on the provision of infrastructure services to address the climate crisis and a variety of social challenges will require annual infrastructure spending from 7% to 19% of annual GDP, representing from US$470 billion to US$1.3 trillion in 2030.1
Chouchani noted that Scotiabank teams are proud to deliver financing solutions across each branch of infrastructure, from power generation and distribution to transportation to telecommunication technologies, which, through fibre cables, towers and data centres, enable local access to a spectrum of commercial and social services that strengthen local economies and society overall.
“To deliver these significant infrastructure investments, our clients require a financial institution with local expertise, to advise on nuanced, regulatory, political and capital markets considerations, and the ability to structure and deploy optimal financing solutions, customized from a full range of credit, debt or equity capital, currency, interest rate and commodity risk management instruments from the Bank’s global advisory, sector and product teams. The multiple LatinFinance awards we earned this year truly reflect these unique strengths we bring to this region.”
Top Caribbean Infrastructure Bank and Infrastructure Financing of the Year
Scotiabank’s deals strategy, volume of roles, and execution quality led to the Bank being named Infrastructure Bank of the Year and Infrastructure Financing of the Year – Caribbean for 2022, based on several prominent transactions in the past year, including:
- Joint Bookrunner for EGE Haina, the largest private generator in the Dominican Republic, for their international bond issuance and first sustainability-linked transaction. This transaction enabled the company to optimize its capital structure in support of future investments in clean, efficient, and dependable power generation in the country.
- Green Loan Coordinator and Sole Lender to AES Dominicana for a green term loan to construct the Santanasol solar facility, which will help accelerate renewable generation deployment.
- Delivered pan-Caribbean power portfolio financing – to improve power supply reliability in three nations including Trinidad & Tobago – for ContourGlobal in September 2021 and May 2022. Acting as Sole Lead Arranger and Bookrunner, Sole LC Provider and Sole Hedge Provider, this transaction featured considerable customization to help our client optimize its capital structures and enable future reinvestment in the business and each country’s power grid.
"There is no shortage of investment opportunity in the Caribbean working to enhance the region’s power efficiency and reliability, including renewable energy,” explained Chouchani, “Scotiabank has a unique set of capabilities to fulfil these mandates. We know the markets and have the expertise to execute complex transactions, whether that’s structuring multi-jurisdictional, multi-currency portfolio financing, enabling an infrequent issuer to access international debt capital markets, or imparting our deep understanding of diverse power technologies, including thermal, wind, solar, and battery storage.”
Renewables financing for Chile’s energy transition
In the context of Chile’s bold energy transition and sustainability goals, Scotiabank was recognized with the Renewable Energy Financing of the Year award for 2022. The Bank provided financing support to Global Infrastructure Partners (GIP) through term loan and letter of credit facilities, when it acquired a 49% interest in the Chile Renovables SpA renewable energy portfolio of AES Andes in Chile, one of the nation’s most significant renewable platforms, including key wind and solar power plants.
With Scotiabank serving as Joint Lead Arranger, Lender, Issuing Bank, and the Green Loan Coordinator, the transaction stands out for its social impact in support of Chile’s energy sector transition and for its unique and tailor-made structure. “This acquisition and project financing transaction facilitates an important new source of investment capital to accelerate Chile’s renewables deployment,” said Chouchani. “Scotiabank collaborated extensively among our teams and partners to deliver a highly innovative structure that addressed complex facets, including shareholder structure, funding timing, and hedging aspects. Ultimately, the solution helped GIP successfully win the competitive acquisition bidding process and establish a flexible financing foundation for potential further investment that complements its longer-term ambitions.”
Loan of the Year transforms Panama’s power matrix
Scotiabank acted as Mandated Lead Arranger for a US$785 million greenfield power project financing, to design, construct, operate and maintain the Generadora Gatún greenfield, natural gas powered, combined cycle gas turbine power plant on the Panama Canal’s Caribbean inlet. With this landmark syndicated loan consisting of a senior secured term loan facility and letter of credit, for Generadora de Gatún, S.A., and sponsors InterEnergy Group and AES Panama, the transaction will add sizable baseload power generation to Panama’s generation sector and reduce its carbon footprint. Scotiabank earned the role in light of its long-standing relationship with participating clients and proven ability to deliver support, despite uncertain market conditions including the COVID-19 pandemic.
Financing structure enables vast digital networks
With telecommunication infrastructure acting as the backbone of the digital revolution, network architecture must be steadily updated and modernized to meet the constant and increasing demand for transmission speed. In support of this goal, KKR partnered with Telefónica S.A. to form OnNet and build the first open-access network in both Chile and Colombia – with Scotiabank proudly helping the joint venture to achieve this goal. The combined projects were recipients of the Digital Infrastructure / Telecoms Financing of the Year award for 2022.
The combined projects are valued at approximately US$1.5 billion. Scotiabank served as Financial Advisor, Joint Global Arranger and Bookrunner in supporting KKR to successfully bid for a share of the key fibre optic assets owned by Telefónica S.A. in Latin America. The transactions included the formation of new legal entities to create a first of its kind open-access network, which will greatly expand digital access to millions of Chilean and Colombian homes.
“We were pleased to assist KKR and Telefónica by providing two separate, bespoke financings, tailored to support the rapid build-out of OnNet's Fiber-To-The-Home business in two of their (and Scotiabank’s) key markets,” commented Randall Bingham, Managing Director and Head, Media and Telecom Group, Corporate and Investment Banking at Scotiabank. “Both deals were denominated in local currency, very successfully syndicated to local banks, and provided a template for future Fiber-To-The-Home financings throughout Latin America.”
Stephen Guthrie, Senior Vice President, International Corporate and Commercial Banking, observed that, “This transaction has attracted much attention as a model for future financing programs to help other nations build open-access networks. It demonstrates how we, as a Bank, think differently and craft solutions that help our clients deliver important infrastructure innovation.”
Shining a light on Scotiabank clients and capabilities
When considering the range of LatinFinance Awards in which Scotiabank was named in 2022, Guthrie concluded that, “These awards highlight our enterprising infrastructure clients across the power, energy, renewables and telecom sectors, and their vision to bring critical development to this region. They also demonstrate that Scotiabank has an unmatched combination of capabilities: the geographic reach in virtually every jurisdiction, to provide local expertise and execution; a full range of products to deliver agnostic, ‘best-fit’ solutions; and infrastructure sector experience among our Global Banking and Markets teams, who devise insightful ideas to satisfy clients’ near, medium and long-term objectives. No other bank in Latin America and the Caribbean can deliver on all three pillars, and we’re proud to empower our clients, and enable this dynamic region develop, grow and meet its potential.”
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