LIMA – Financing to complete the work of upgrading state-owned PetroPeru’s Talara refinery, a $5.4 billion project, should be ready in the very short term thanks to the participation of the Spanish Export Credit Insurance Company (CESCE) and a bond sale, the Peruvian oil firm’s chairman said on Friday.

In a press conference with foreign correspondents, Luis Garcia Rossel said all financing must be fully arranged by the end of the first half of 2017.

The CESCE will participate by providing loan guarantees totaling $1.25 billion – at a rate of 6 percent – to the foreign banks financing the project.

PetroPeru also will sell $3 billion in bonds at an interest rate of 6 percent, as well as using $835 million of its own funds in the pre-operational stage and making a $315 million capital contribution.

The cost of modernizing the refinery – located in the Piura region, 1,200 kilometers (745 miles) north of Lima – has gradually increased since the project was first proposed in 2008 with an initial budget of $1.3 billion.

The Talara refinery now has the capacity to process 65,000 barrels per day, but its current net production is just 55,000 bpd. Once the modernization project is completed, output is projected to rise to 95,000 bpd by 2021.

The company’s goal is to finish awarding contracts for auxiliary work in June, with Spanish engineering company Tecnicas Reunidas – which has worked on the project since 2010 – considered the frontrunner.

PetroPeru supervisors expect the project will be completed at the end of 2020, Garcia Rossel said.