IIC Approves US$30 Million for Developing Ecuador’s Steel Sector
Financing for Acería del Ecuador C.A. contributes to expansion of steel production capacity to meet growing domestic demand
Washington, D.C., June 12, 2015 — The Inter-American Investment Corporation (IIC) approved a loan of up to US$30 million to Acería del Ecuador C.A. (Adelca) for the construction, development, and operation of a new steel production plant located in the San Francisco de Milagro canton in the Guayas province, some 40 km from Guayaquil. The loan will also enable the company to finance the purchase of the main equipment and machinery for the project. The IIC loan will be partially guaranteed by SACE S.p.A., Italy’s export finance agency.
The IIC also approved technical assistance to conduct an environmental assessment of the facilities to identify existing or potential environmental problems and to evaluate the risks and impact in the vicinity of Adelca’s current facilities and on the site of the proposed plant. This environmental assessment will also include recommendations to mitigate and control the possible environmental and social problems identified.
“With this loan, the IIC will be supporting the steel sector in Ecuador and increasing Ecuador’s steel production capacity by 400,000 metric tons per year, as well as adding a new line of wire rod products, value-added products that are currently imported to Ecuador. This will reduce dependence on imports to meet domestic steel demand and expand the range of products, which will benefit many sectors of the Ecuadorian economy, construction and infrastructure in particular but also transportation, energy, and manufacturing,” said Javier Hernández, the lead IIC investment officer in charge of the operation.
As part of this relationship, Adelca has benefited from the IIC’s programs to strengthen corporate governance for family businesses.
Adelca, with more than 50 years of successful operation in Ecuador, is an integrated steel producer and one of the leading companies in the country’s steel industry. Adelca uses mainly steel-based scrap in the smelting process to produce billets which in turn are used in its rolling mills to produce long steel products such as steel bars. Adelca, with more than 13 points of operations in Ecuador, distributes and markets its products mainly in the country. Adelca del Litoral S.A. is a subsidiary of Adelca, created to develop the project. Adelca was acknowledged in the magazine “Recycling Today” and holds several certifications (ISO 9001, ISO 14001 and OHSAS 18001). The company is also a member of the Network for the Eradication of Child Labour, and in the last three years it has received several awards from the national government for its inclusion of disabled workers and, more generally, for its environmental and social responsibility in its operations.
About the IIC
The IIC, a member of the Inter-American Development Bank (IDB) Group, promotes private-sector development in Latin America and the Caribbean with a focus on small and medium-sized enterprises (SMEs). The Corporation provides companies with financing in the form of equity investments, loans, and guarantees, as well as with technical assistance, advisory services, and knowledge products. In 2014, the IIC approved 64 operations totaling $426.3 million. Since its inception, the IIC has approved more than 920 loan and equity investments for SMEs and financial intermediaries, for a total of US$5.63 billion. An additional $3.7 billion has been mobilized through cofinancing and syndication agreements. For additional information on the IIC’s activities, visit www.iic.org.
Contact: Javier Hernández
Telephone: +1 (202) 623-3992 in Washington, D.C.