"IFC's participation in the Panama Canal expansion project, at a time of a global financial crisis, reflects our confidence in one of the most important infrastructure projects in Latin America and the Caribbean," IFC Chief Executive Lars Thunell said in a press release.
The IFC said the 20-year financing will support the $5.25 billion project to double the canal's capacity to handle large post-Panamax container ships.
The expansion includes construction of a new set of locks with water-saving basins and improvements to navigational channels.
Revenues from the canal account for about 12% of the Panamanian government's budget last year, according to the IFC.