France joins development bank loan to 100 MW solar project in El Salvador

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Last Thursday, The Inter-American Development Bank (IDB) announced that a subsidiary of the French Development Agency would add to a US$88 million loan to build El Salvador’s first large utility-scale solar project with a $30 million co-loan.

Last December IDB announced that it would loan $57.7 million to the Providencia Solar project, joined by a $30 million co-loan from the Canadian Climate Fund for the Private Sector in the Americas. The combined $118 million loan features an 18.5-year term and will support the construction, operation and maintenance of the project.

France’s Neoen and Almaval plans to build the Providencia Solar project near an airport outside of the nation’s capital of San Salvador. The $151 million project won the majority of capacity awarded in a 2014 auction, bidding in at a price of U$102 per megawatt-hour.

IDB notes that in addition to providing financing, it has led a consultive process to make the contractual structure for the power purchase agreement bankable and to improve the viability of the government’s most recent renewable energy solicitation.

Despite the awarding of contracts for 94 MW of solar projects in the 2014 auction, the largest PV plant that pv magazine could confirm has reached commercial operation in El Salvador is a 2.5 MW plant in Moncagua. It has also been reported that SolarReserve has broken ground on the 20 MW Acajutla project in El Salvador.

Development banks including IDB, the World Bank and the U.S. government’s Overseas Private Investment Corporation have played a major role in financing many of the first large utility-scale solar projects in Latin America, most of which have been built in Chile.

Coverage of this development is also available in Spanish on the pv magazine Latinoamérica website.