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IDB approves $188 million to assist two private electricity distribution companies in Dominican Republic

The expansion and modernization of the electricity distribution sector in the Dominican Republic will receive the support of $188 million in financing from the Inter-American Development Bank.

The Bank’s Board of Executive Directors approved a $75 million loan from the Bank’s ordinary capital and a $113 million syndicated loan to support an investment program by two private sector electricity distribution companies - Empresa Distribuidora de Electricidad del Norte, S.A., and Empresa Distribuidora de Electricidad del Sur, S.A.

The two firms were formed in 1999 following the capitalization of the thermal generation and distribution assets of Corporación Dominicana de Electricidad, a government enterprise. The capitalization resulted in the creation of two private generation companies and three private distribution companies.

The IDB resources will support an investment program designed to improve the quality and efficiency of the service and to strengthen environmental protection of the two firms. Better management and upgraded and new facilities will reduce electricity system losses.

Unión Eléctrica Fenosa, S.A., a Spanish private utility, is the strategic investor in both companies.

"This ambitious investment program goes beyond the electricity sector, as the investor is contributing new technologies and a new management approach, which can be applied to other businesses," commented IDB Private Sector Department Manager Hiroshi Toyoda. "New private subcontractors to the capitalized companies, not previously present in the Dominican Republic, will assist in carrying out the program."

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