The International Finance Corporation, the World Bank's private investment arm, has agreed to provide $378 million in financing to Axion Energy Argentina to support the upgrade of a refinery near Campana.
The package consists of an eight-year, $78 million loan from IFC and $300 million from commercial banks including ICBC, Santander, BBVA, Crédit Agricole and Citibank with the second tranche divided between five- and six-year loans, according to an IFC statement.
The expansion will allow the refinery to “increase its production of refined products including ultra-low sulfur diesel, reduce sulfur emissions, and increase access to cleaner fuels by expanding its distribution network”, the statement said. The increased supply is meant to reduce Argentina's reliance on imported fuels and contribute to improving air quality.
Axion plans to increase gasoline production by 50 percent to 650,000 cubic meters per year and diesel production by 60 percent to 1.2 million cubic metres annually. The company's current activity accounts for roughly 15 percent of Argentina's refining capacity, with its Campana refinery now in business for more than 100 years.
According to Axion CEO Adrian Suarez, the upgrades and expansion will help Argentina meet energy needs more sustainably.
“The mobilisation of long-term funding from international banks not only demonstrates Axion's strong profile in the market, but also demonstrates potential for additional private investment in Argentina,” Suarez said.
IFC has committed more than $1.3 billion into Argentinian projects deemed sustainable in the last 12 months, the lender said in a statement, with total investments in developing countries reaching nearly $18 billion in 2015.