By Andrew Beatty
PANAMA CITY (Reuters) - The Panama Canal Authority will seek $2.3 billion in financing before the end of the year to pay for part of the biggest-ever expansion of the famous waterway.
The canal's administrator, Alberto Aleman Zubieta, told the Latin America Investment Summit on Tuesday that it is in talks with banks to pull a package together for a major part of the expansion that will cost $5.25 billion in total.
"We are looking at about $2.3 billion in financing for this project," Aleman said. "We are negotiating at this time with the banks to achieve the best package possible for the authority."
Aleman said the authority was also in talks with international lending institutions and that the financing would be a combined package with the private sector. Asked when he wanted to see it ready, he said: "The end of this year."
Aleman was bullish on the prospects of securing financing despite the ongoing U.S. credit crisis and troubles at some of Europe's biggest banks.
"The canal (has) very good credit, now there is a flight to quality projects and the canal is one of those projects."
He also said the rising cost of labor and raw materials in Panama caused by the country's sustained real estate boom would not cause the Authority to revise its cost estimates for the expansion in the short term and that contracts already awarded have come within the budget estimates.
The canal is a short cut between the Pacific and Atlantic oceans and saves ships a long haul around the southern tip of South America. Continued...
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