IDB Finances Bolivian Program for Universal Access to Electricity in Rural Areas

The Inter-American Development Bank (IDB) approved a $200 million loan and a $2 million grant to support a Bolivian program to universalize electricity service in rural areas. It aims to expand access to basic electricity, promote productive uses of energy with a gender focus, and bolster institutional capacity for energy investment planning.

The loan, which was approved by the IDB's Board of Executive Directors, consists of $100 million from the IDB and $100 million from the Korea Infrastructure Development Co-Financing Facility for Latin America and the Caribbean. The $2 million in grant funding comes from the Low Carbon Energy Fund for People and Planet, with resources contributed to the fund by the Global Energy Alliance for People and Planet. 

The program’s broad purpose is to reduce poverty in the country by universalizing the service of electricity as a central pillar of a fair and inclusive energy transition, which, in turn, is among the climate action goals for 2030.

Although Bolivia has managed to increase its national electricity coverage from 67.1% in 2005 to 94.1% in 2021, its electrification rate in rural areas is among the lowest in Latin America and the Caribbean, at just 81.5%.

Accordingly, the program will finance infrastructure investments to expand access to electricity in rural areas using different technologies. Solutions include extending distribution networks, building mini-grids with hybrid renewable energy and energy storage systems, smart metering, installing solar photovoltaic plants, and equipment for productive uses of electricity with a gender focus and for social services like education, health and water.

The program will benefit at least 56,000 households in rural areas with electricity, as well as the people, including indigenous communities, who will gain from businesses that use electricity for production. 

The IDB's $100 million loan component has a 24.5-year repayment period, a 12.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).

The $100 million component from the Korea Infrastructure Development Co-Financing Facility for Latin America and the Caribbean has a 30-year repayment period, a 7-year grace period, and an annual interest rate of 1.1%.