EPM - UCL

pending

The proposed investment entails an unsecured corporate loan (“UCL”) of up to US$600m in COPequivalent (the “Project” or the “Facility”) to Empresas Públicas de Medellin E.S.P (“EPM” or the“Company”). EPM, owned by the City of Medellin, is a municipal utility that operates across various regulated sectors. The Facility would have a tenor of up to 10 years, including up to 4 years grace period, and would consist of: 1) an A-Loan of up to US$250m in COP equivalent, and 2) mobilization of up to US$350m in COP equivalent. The use of IFC proceeds will be destined only to a specific list of eligible capex activities in EPM’s power distribution segment with a nominal voltage of 44Kv or less (i.e. medium and low voltage) and with limited environmental and social (E&S) risks and impacts. IFC proceeds will not go to any form of general-purpose corporate uses. The activities to be funded by IFC will focus on distribution system expansion projects and energy loss management and control projects, spread out throughout the Department of Antioquia in Colombia. The expansion of the distribution infrastructure will include greenfield installations, interconnection of rings to improve reliability, coverage expansion (such as connecting isolated clients in rural areas), and connections for third parties such as industrial users. EPM estimates that this will include the installation of approximately 3,000 km of new medium voltage overhead wires and 7,000 km new low-voltage overhead wires. The energy loss management and control projects includes: replacement of distribution infrastructure to improve service quality and safety for people and the system; replacement of cables and power transformers to address equipment failure, preventive and corrective maintenance, and end-of-life replacement; control and maintenance of non-technical losses, including interventions in formal and informal settlements; and service improvements such as installation of automatic equipment (such as reconnectors), improvements of service to users, and compliance with quality requirements established in regulations. This investment will improve access to reliable and high-quality utility services for more than 2.8 million customers served by EPM in Colombia, including some of the most vulnerable populations in the country.