Hunton Andrews Kurth Represents Consortium of Lenders in Project Financing for Codelco Water Supply Project

In March 2023, Aguas Horizonte SpA, an affiliate of Marubeni Corporation and Transelec Holdings Rentas Limitada, closed a credit agreement to finance the construction and operation of a reverse osmosis desalination plant and water supply system (the Project) in the coastal area of Northern Chile. The Project will mitigate Chile’s ongoing water supply issues by supplying water to the mining operations of Chilean state-owned mining company, Corporación Nacional del Cobre de Chile (Codelco). It will supply up to approximately 70,000 cubic meters of water per day to three major Codelco copper mines, with a future potential expansion to approximately 170,000 cubic meters per day, significantly reducing Codelco’s groundwater consumption.

“The Project’s sponsors and lenders, as well as Codelco, are to be applauded for their dedication to this Project and ability to overcome multiple challenges,” said Christian Rudloff, counsel at Hunton Andrews Kurth LLP. “They have worked tirelessly to see this Project come to fruition despite the myriad of global issues during the past years (including external challenges, such as COVID and the effects of the Ukraine war in the supply chain) that threatened to derail it more than once. The ability to close this Project also shows a path forward for other desalination projects in a country with increasing water scarcity issues, especially in Chile’s northern regions and the thriving mining industry.”

“As we continue to see the demand for water increasing in Northern Chile and other areas suffering from water scarcity, non-conventional water resources will remain instrumental to the development of these arid regions,” added Jeff Schroeder, head of Hunton Andrews Kurth’s energy and infrastructure team.

Financing for the Project was provided by a consortium of lenders that included Crédit Agricole Corporate and Investment Bank; Mizuho Bank, Ltd.; the Norinchukin Bank; MUFG Bank, Ltd.; Sumitomo Mitsui Banking Corporation; Sumitomo Mitsui Trust Bank, Limited; SBI Shinsei Bank, Ltd.; Banco Bilbao Vizcaya Argentaria, S.A.; Banco Santander, S.A.; Societe Generale; Intesa Sanpaolo S.p.A; KfW IPEX-Bank GmbH; and Korea Development Bank.

The US-based firms Shearman & Sterling LLP and Hunton Andrews Kurth, acting as international co-counsel, advised the lenders in this transaction, with Garrigues acting as lenders’ local counsel.