Ecuador to renovate, strengthen its electric system with IDB support

The Inter-American Development Bank (IDB) has approved a $100 million loan to help Ecuador revamp, repower and improve the reliability of its electric system.

The loan will provide continuity to the IDB’s support to Ecuador’s power sector, contributing to the government’s efforts to promote investments to strengthen the National Interconnected System. This operation focuses on equipment renewal, replacement and repowering in both the national transmission and distribution systems. It will also help strengthen management and planning capabilities.

Ecuador’s power sector is a leader in the region due to its maturity, reliability and high service coverage and quality indices. These results were achieved thanks to careful sectoral planning coupled with a constant investments flow that has contributed to enhance and strengthen power infrastructure and to advance towards a robust, efficient and reliable National Interconnected System. The Bank has helped finance Ecuador’s investment programs over the past decade, which has seen progress in areas such as transmission, distribution, rural electrification and energy efficiency.

With the new loan, the Government of Ecuador will implement projects that will ensure service continuity, including technological measures aimed at enhancing the system’s digitalization and promoting its integrated management. In addition, these investments will improve the system’s operational capabilities by replacing equipment that has reached the end of its life cycle or met its design capacity limit.

The funds will also support projects to boost environmental waste management capabilities and institutional strengthening to improve energy prospecting and analysis. Plus, they will finance the first stage of the Gender Action Plan for the electricity sector, including actions to reinforce gender equality in the areas of policy formulation and project planning, generation and management.

The $100 million IDB loan is for a 25-year term, with a 5-year disbursement period, a 7.5-year grace period and a LIBOR-based interest rate.

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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Carlos Echeverria
IDB Project Team Leader