The Inter-American Development Bank (IDB) will provide $143 million to support Ecuador in order to advance changes in its energy mix, to improve sector indicators, and to support recovery plans in areas affected by the recent earthquake. As a result of the support, Ecuador will have a more sustainable and reliable energy system for all citizens.
Ecuador is carrying out an ambitious process to transform the electricity sector through a national initiative called the Energy Mix Change (CME). Some of the first results of this initiative are evident in that Ecuador is ranked fifth place in energy security worldwide and first place in Latin America and the Caribbean, according to the ranking of the World Energy Council. The IDB supports Ecuador in this process of sector transformation.
The overall objective of the new financing program is to support the advancement of the initiative, improve sector indicators and support the recovery plan in areas affected by the quake. The specific objectives are: (i) to provide continuity to the projects of the National Transmission System- to facilitate the transport of newly generated energy and to strengthen national infrastructure; (ii) to strengthen and expand the National Distribution System in urban and rural marginalized areas (UM) and to contribute to the reconstruction of infrastructure in areas affected by the earthquake; (iii) to support the advancement of the National Program for Efficient Cooking; and (iv) to strengthen institutions in the management of services.
The program is aligned with the objectives of Sustainable Energy for All (SE4All)), globally coordinated by the United Nations, and has the support of the IDB in Latin America and the Caribbean. As part of this initiative, the IDB has committed to contribute to the advancement of regional energy efficiency programs with specific goals for 2030.
The program has ordinary capital resources from the IDB for $118 million with a payback period of 25 years, 48 months disbursement, and an interest rate based on LIBOR. The financing includes $25 million from the Korea Infrastructure Development Co-financing Facility in Latin America and the Caribbean to the IDB with an interest rate of 2.5 percent. The local contribution resources of the Ecuadoran government total $17.09 million.
About the IDB
The Inter-American Development Bank is a leading source of long-term financing for economic, social and institutional projects in Latin America and the Caribbean. Besides loans, grants and guarantees, the IDB conducts cutting-edge research to offer innovative and sustainable solutions to our region’s most pressing challenges. Founded in 1959 to help accelerate progress in its developing member countries, the IDB continues to work every day to improve lives.