KB Asset Management Co. Ltd. has participated in a $170 million refinancing package of a power transmission line in Peru by providing a $30 million senior loan on behalf of South Korea insurance companies.
The refinancing, composed of senior loans, was intended to recover part of the $200 million investment made by US-based Global Infrastructure Partners and Cobra Instalaciones y Servicios, a Spanish contractor, in the energy facility, according to industry banking sources on August 15. Both companies own the project.
They sold the loans against the 370km electric transmission line constructed in northern Peru early this year.
South Korean insurance companies provided the credit via an infrastructure fund launched by KB Asset.
They are expected to earn mid-5% interest on the loan during a 30-year investment period, based on payments by the Peruvian government for the facility use.
“In countries like Peru and Chile, infrastructure projects with government guarantees have stable revenues and carry lower risk, compared with private infrastructure projects in developed countries paying similar interest rates,” said a KB Asset source.
“They are popular among domestic insurance companies that chase long-term investments.”
By Daehun Kim and Jihye Ma
<Edited by Yeonhee Kim>
Photo: Getty Images Bank