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Peru to develop new sustainable energy matrix with support from IDB

$25 million loan to boost use of renewable sources, promote energy efficiency while balancing resource use with social, environmental concerns

Peru will develop a new sustainable energy matrix to maximize its natural gas, oil, electricity, and renewable energy resources while taking social and environmental considerations into account with help from a $25 million loan from the Inter-American Development Bank.  

The loan is part of the Bank´s objective to increase its lending for renewable and climate-related activities, and help countries tap sustainable energy sources.

This operation is the second of four consecutive programmatic policy-based loans for Peru’s new energy matrix. It will support reforms and decisions to promote sustainable and diversified energy production, transformation and use. This will help create a stable and predictable business atmosphere that can attract investments and promote growth while taking into account social and nature-preservation concerns.

The funds will also be used to help prepare a Strategic Plan for Sustainable Energy and Bioenergy, which will study the potential for mitigating emissions; an assessment of hydropower infrastructure vulnerability to climate change risks; develop a Strategic Environmental Assessment; boost environmental standards through regulations training and support for eco-efficient plans at municipality level; guidelines on minimum standards and energy efficiency labeling; and help set up an Energy Efficiency agency, among other measures.

The program supports plans for supplying and transporting compressed or liquefied natural gas to markets outside Lima, launching an auction process for hydropower development, and implementing regulations for combined-cycle gas-powered plant standards.

Peru’s new energy matrix will also promote inclusive participation and social management mechanisms and boost institutional capacity at the national, regional, and local level through training, citizen participation guides, and other means.

The loan, from the IDB’s ordinary capital, is for a 20-year term, with a five-year grace period and a variable interest rate based on Libor.

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