$200 million financing to support Central America’s biggest renewable energy project
The Inter-American Development Bank (IDB) approved a $200 million non-sovereign guaranteed financing for the construction of a 305.5 MW hydropower plant in the Limon Province in Costa Rica, Central America’s biggest renewable energy project.
The IDB loan will help finance the design, construction, operation and maintenance of the plant and its associated facilities, including transmission lines, substations and access roads. The plant will use waters from the Reventazón River to generate an average of 1,407 gigawatt-hour (GWh) of electricity per year. Once completed, the plant will represent approximately 10 percent of Costa Rica’s total installed electricity generation capacity.
The project will be the first to establish an offset for river habitat in Central America, which could be replicated in other projects throughout the region. It will also contribute to the Jaguar Corridor Initiative and long term preservation of the largest living cat in the Americas.
“This project will not only help Costa Rica address its growing demand for electricity but also contribute to the country’s goal of reducing its carbon emissions,’’ said Jean-Marc Aboussouan, who heads infrastructure financing for private sector projects at the IDB’s Structured and Corporate Finance Department. “Moreover, the successful implementation of the environmental and social elements in this project will provide an important model for hydroelectric projects in Latin America.”
The project, sponsored by the Instituto Costarricense de Electricidad (ICE), includes the construction of a 130 meter high dam, flooding of a 6.9 km2 reservoir and a 4.2 kilometer river diversion between the dam and powerhouse. The plant is expected to become operation in August 2016.
The IDB loan is for a 20-year term and it is expected to be complemented by a syndicated loan of approximately $450 million and co-financing from third-party institutions of $294 million.
- Romina Tan Nicaretta