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IDB approves $100 million for rural electrification in Bolivia

Project to enhance transmission coverage, help poverty alleviation efforts

The Inter-American Development Bank has approved a $100 million loan to help advance the living standards of Bolivia’s low-income households that lack or have only limited access to electricity by improving and expanding service coverage.

The project focuses on boosting up power availability in rural areas, fostering the population’s integration to public and social services and contributing to the productive use of electricity, and to poverty alleviation efforts.

The program, which includes a gender approach, aims to foster energy consumption in rural locations and increase transmission capacity in order to enhance its coverage area, thereby helping to reduce CO2 emissions typically associated with the use of fossil fuels by isolated power systems.

While rural electrification jumped from 25 percent to 66 percent between 2001 and 2015 by adding an extra 1.3 million households, there are still some 375,000 homes without electricity, 86 percent of which are located in rural areas –mostly in low-income indigenous communities.

Achieving universal coverage would demand $1.9 billion in investments. Ninety percent of the rural homes currently lacking power could be linked to the network, with the remaining 10 percent using alternative energy sources.

Under the program, some 35,000 rural homes that have no electricity will be connected to the distribution grid, with an additional 19,000 households connected directly to the Padilla-Monteagudo-Camiri distribution line. The program also seeks to promote the productive use of electricity by at least 1,400 homes located in rural areas.

The program’s total cost is $100 million. The lending consists of a $85 million loan from the Bank’s ordinary capital for a 30-year term and a 60-month disbursement period, at LIBOR-based interest rate, and a second, $15 million credit from the Bank’s Fund for Special Operations for a 40-year term, with a 60-month disbursement period and at 0.25 percent interest.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-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.