Support from the IDB for loans to finance irrigation projects, wind and solar power farms and upgrades in the citrus sector
The Inter-American Development Bank (IDB) has approved a $250 million credit line for investment projects in Uruguay, as well as the first individual operation as part of it -- $125 million to promote investment in infrastructure and productive investment by providing medium- and long-term financing through the Bank of the Republic.
This first individual loan corresponds to the so-called Financial Program for Productive Development. Its specific goals are to finance investment in electric power plants using renewable energy sources, essentially wind and solar, so as to diversify the country’s energy mix and cut CO2 emissions, and to finance agricultural investment in irrigation projects and upgrading of the citrus-growing sector.
“With this line, the BROU is strengthened as the financial arm of energy and agricultural investments that contribute to growth that is sustainable and based on productivity and the competitive advantages of Uruguayan agriculture,” said Francisco Demichelis, IDB project team leader.
The program will provide the Bank of the Republic with resources to finance companies that develop wind power farms. It is estimated that the plan will help finance a series of projects that will generate up to 120 MW of clean energy and help alleviate problems associated with the dependency of the Uruguayan energy mix during years of little rainfall.
It will also finance around 2MW in small, distributed-generation solar energy plants so as to demonstrate the viability of this technology.
As for investments in the agricultural sector, the program calls for financing projects that will set up irrigation for around 16,600 hectares of rain-fed land, as well as projects in the citrus-growing sector that would involving the replanting of up to 4,850 hectares, helping upgrade approximately 30% of all land used for this purpose.
In both cases the investments that are financed will be accompanied by training and technical assistance.
The first, $125 million individual loan approved by the IDB under this line of credit for investment projects is over 25 years with a five-and-a-half year grace period and an interest rate pegged to the LIBOR.