BBVA again supports the Venezuelan steel industryJanuary 16, 2013
Global Trade Finance Deal Announcement
- After having arranged in 2011 the financing for the first phase of the purchase of steel producing equipment by EPSSN (the Venezuelan National Steel Company), BBVA is leading a syndicate of banks that will lend further €162m to finance the new steel plant in Venezuela
- The steel plant of EPSSN is located at Ciudad Piar, which is the top area in Venezuela for intermediate industries and is designed for an initial production capacity of 1,550,000 tons per year of high quality steel
In December 2012 BBVA in conjunction with its Venezuelan subsidiary BBVA Provincial and the Ministry of Popular Power for Planning and Finance of the Bolivarian Republic of Venezuela, concluded the second phase of the financing for the purchase of machinery for the Venezuelan National Steel Company (EPSSN). The equipment will be manufactured by SMS Siemag AG (Germany). Construtora Andrade Gutierrez S.A., a Brazilian company, was awarded the EPC contract. SMS Siemag AG is the nominated supplier that will also handle the installation of the steel equipment.
The total value of the project, consisting of steel production and rolling mills, is approx. €2.9 billion ($3.8 billion). The syndicate of banks led by BBVA will provide long-term loans of in total €445m ($570m) which are insured by the German Export Credit Agency (Euler Hermes Deutschland AG).
The financing for the German equipment is split into two phases. The first phase, which has been signed in December 2011 amounts to €283m ($362m) and the second phase, which has just been signed in December 2012 amounts to €162m ($207m).
This project will help to boost the Venezuelan economy, generating 8,000 jobs directly and 20,000 indirectly during the construction phase. Once the plant is in operation it is expected to provide 2,200 direct and 6,500 indirect jobs.
Once operating, which is scheduled for the beginning of 2015, the plant, operated by EPSSN, will serve the domestic industry with high quality steel products, thus contributing to the country's economic and social development.
This operation confirms BBVA's commitment to Latin America and in particular to the Bolivarian Republic of Venezuela.
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