BBVA Breaks New Ground with Peru’s First Sustainable Mining Corporate Loan

BBVA Breaks New Ground with Peru’s First Sustainable Mining Corporate Loan

(IN BRIEF) BBVA, a prominent financial institution, has made history by providing the first sustainable corporate loan to a mining company in Peru. The $200 million ‘Club Deal’ facility benefits mining companies Ares and Amarillo Mineraçao do Brasil. This groundbreaking loan is ‘KPI-linked,’ with the interest rate tied to the mining company’s performance in three sustainability indicators: physical security, water management, and waste reduction, reviewed annually by an independent agency. Hochschild Mining, a responsible precious metals producer, played a pivotal role, and its subsidiary Ares is a key beneficiary. Meanwhile, Amarillo Mineraçao do Brasil is progressing with the Mara Rosa gold project in Brazil.

(PRESS RELEASE) BILBAO, 26-Sep-2023 — /EuropaWire/ — BBVA (BME: BBVA), a Spanish multinational financial services company, has taken a groundbreaking step by granting the first-ever sustainable corporate loan to a mining company in Peru. This landmark agreement between BBVA and Hochschild Mining represents a ‘Club Deal’ facility with a total value of $200 million, benefiting the mining firms Ares and Amarillo Mineraçao do Brasil.

Distinguishing itself in the realm of sustainability, this operation falls under the ‘KPI-linked’ category. It features a unique adjustment mechanism that ties the loan’s interest rate to the performance of the mining company in three crucial sustainable Key Performance Indicators (KPIs) related to physical security, water management, and waste reduction. An independent agency will conduct annual reviews to ensure compliance with these sustainability metrics.

BBVA, serving as a sustainable co-agent, played a pivotal role in assisting Hochschild Mining in orchestrating the interest rate adjustment mechanism. The bank also meticulously reviewed the requisite legal documentation to certify the loan’s sustainable quality.

“This year, through the mining companies Ares and Amarillo Mineraçao do Brasil, subsidiaries of Hochschild Mining, we received a financing request for $200 million. BBVA was selected as joint lead arranger and joint bookrunner, as well as sustainable co-agent due to our global experience in ESG operations in the region,” explained Victor Gordillo, Head of Corporate Banking at BBVA Peru.

“This first sustainable loan marks an important milestone for Hochschild Mining and demonstrates our decision to be a responsible and innovative mining company that is committed to a better world,” said Eduardo Noriega, CFO of Hochschild Mining.

About Hochschild Mining: Hochschild Mining boasts a rich heritage spanning more than a century and has dedicated itself to the production of precious metals. Committed to building a responsible corporate culture, the company actively contributes to environmental, social, and governance issues. Currently, it operates three mining facilities, with two located in Peru, one in Argentina, a construction project underway in Brazil, and additional projects in the region.

About Ares: Ares represents Hochschild Mining’s primary investment vehicle in Peru and stands as one of the largest gold and silver producers in the country. Its flagship mining unit, Inmaculada, is situated in the Ayacucho region.

About Amarillo Mineraçao do Brasil: Amarillo Mineraçao do Brasil is spearheading the Mara Rosa gold project in Brazil’s Goias region, with production slated to commence in the first half of 2024.

BBVA remains committed to promoting sustainable initiatives and fostering responsible business practices, making this sustainable corporate loan a significant milestone in Peru’s mining sector.

SOURCE: Banco Bilbao Vizcaya Argentaria, S.A.