Finances Photovoltaic Solar Energy Project in El Salvador

Finances Photovoltaic Solar Energy Project in El Salvador

- in Markets & Policies, Solar Projects
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The Providencia Solar project, located in the Department of La Paz, to provide an increase of 100MW in installed capacity of renewable energy and help reduce carbon emissions

The Inter-American Development Bank (IDB) has approved a $57.7 million loan from its ordinary capital and $30 million from the Canadian Climate Fund for the Private Sector in the Americas, which is administered by the Bank, to finance the private sector in El Salvador in the construction, operation and maintenance of a photovoltaic solar energy plant and its related facilities.

With a total installed capacity of 100MW, the Providencia Solar power plant will be the first utility-scale solar power plant in El Salvador and will be located near the Monseñor Óscar Arnulfo Romero International Airport outside the capital city San Salvador. Providencia Solar is majority owned by Neoen SAS, a French independent renewable energy producer. On average, the plant will supply 170 GWh of electricity per year to the national grid, allowing for an easing of El Salvador’s dependence on energy from fossil fuels.

‘The financing of the first utility-scale solar plant in El Salvador is an important step forward for the country to promote the incorporation of more non-traditional renewable energy in its energy network,’ said Jean-Marc Aboussouan, Chief of the Infrastructure Division in the IDB´s Structured and Corporate Finance Department. ‘It also shows that solar energy can be competitive and viable in the region.’

The main benefits expected from the project include a 100MW increase in installed capacity in non-conventional renewable energy and the allocation of approximately $7 million during the life of the Project to finance high priority social investments in the Municipality of El Rosario/La Paz to be identified and executed by the Social Investment Fund for Local Development of El Salvador. The increase in installed capacity will support El Salvador’s strategy of diversifying its energy matrix, eliminate approximately 114,000 tons per year in carbon emissions and boost the private sector’s role in the energy sector.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

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