QUITO – The Ecuadorian Social Security Institute, or IESS, delivered the first tranche of a $165 million loan for the Pañacocha oil project in the northern province of Sucumbios, it was reported Wednesday.
The Pañacocha project received a disbursement of $9.06 million, equivalent to 5.49 percent of the total value of the loan.
On Feb. 1, the IESS and state oil firm Petroecuador signed an agreement to create an investment trust to finance the project.
The deal is the first such investment by the IESS, which is responsible for retirement pensions and the public health insurance system.
The $165 million loan carries an interest rate of 5 percent and a maturity of seven years, with a one-year grace period.
In signing the agreement creating the trust, Wilson Pastor, CEO of Petroecuador subsidiary Petroamazonas, which is developing the project, said Pañacocha will be developed using cutting-edge technology and that production will begin in September.
He said the project will yield 23,800 barrels per day at its peak, bringing a significant amount of revenue into government coffers.
Separately, the president of the IESS’s board of directors, Ramiro Gonzalez, announced in February that the institute also plans to invest in the electricity sector.
Without providing further details, he said the project is a 70 MW power plant that will come online in a period of “between 18 and 20 months.” EFE