MIGA has issued a $0.73 million guarantee to Abengoa S.A. of Spain covering its loan guaranty of $1.8 million to Fleet National Bank for its loan to Teyma Uruguay S.A. in Uruguay. The guarantee is for a period of up to seven years and covers against the risks of transfer restriction, expropriation, and breach of contract.
Abengoa’s loan guaranty will allow Fleet National Bank to issue $1.8 million in letters of credit for Teyma to purchase waste management equipment. Teyma will then lease the equipment to Consorcio Ambiental del Plata (CAP), a project that includes the collection of solid waste in five neighborhoods in the capital city of Montevideo, the sweeping and cleaning of public roads, and the moving of refuse to a city-run landfill site. CAP is a consortium established in Uruguay for the sole purpose of this seven-year public bid, which follows a previous concession to a different company. CAP is wholly owned by Teyma, which is 92 percent owned by Abengoa.
The project introduces a new system of 24-hour, year-round collection containers to an area with a population of 150,000 people. It also reduces collection costs by 30 percent compared to the previous concession. CAP’s new equipment is expected to reduce accidents on the job and improve working conditions. Training programs will coach employees on operations, safety risks, and environmental care. By supporting a new market entrant following an open bidding process, the project is also consistent with the World Bank Group’s strategy of increasing competitiveness in Uruguay.