EIB Loans $211M for Hydropower Plants in Panama
October 30, 2009 // Published as a news service by IHS
The European Investment Bank (EIB) granted a $211 million loan for three more hydropower plants in Panama.
The loan will help finance the construction and operation of the Guanaca, Lorena and Prudencia hydropower plants on the Chiriqui river in western Panama.
With a total installed capacity of 117.5 megawatts, the three new plants will be integrated into the river's existing hydroelectric system, now consisting of the Fortuna and Canjilones plants.
The project will help to meet the rapidly growing electricity demand in Panama in an environmentally sustainable way, using available water resources.
The loan was made to the two subsidiaries of the Gas de France-Suez Group holding the concession for the Dos Mares project.
At the signing ceremony on Oct. 27, EIB vice president Carlos da Silva Costa stressed the importance of this type of investment for "ensuring the local population's security of supply while limiting the climate change impact."
The EIB granted this loan under its Sustainable Energy and Security of Supply Facility. The project meets the facility's requirements inasmuch as it is located in Latin America and is aimed at strengthening energy security on the basis of a renewable energy resource.
This is the EIB's sixth operation in Panama, where it has now lent a total of €719 million, including $500 million to finance the widening of the Panama Canal.
At this time of economic downturn, the EIB said it is pressing ahead with its financing operations in Latin America to ensure that viable eligible projects are not jeopardized.
Background
As the long-term financing institution for the European Union (EU), the EIB works to promote EU objectives. Created in 1957, the EIB operates in the 27 EU member states and more than 130 countries in Asia, Latin America, central and eastern Europe, the Balkans, Africa, and regions in the Mediterranean, Caribbean and Pacific. It provides loans outside the EU in the framework of the EU's development assistance policies.
The Sustainable Energy and Security of Supply Facility is a multiannual €3 billion credit line designed to finance projects in developing countries that contribute to the achievement of sustainable energy and security of energy supply. Latin America is one of the regions eligible for financing from this credit line, which is used in cases where the EIB does not need the European Commission's guarantee to mitigate the political risk and safeguard its high credit rating.
Source: European Commission (EC).