Proparco, represented by its Chief Executive Officer Grégory Clemente, and IIC (Inter-American Investment Corporation, member of the IDB Group), represented by its Chief Executive Officer James Scriven, have today signed an agreement for the construction and operation of a photovoltaic power plant in El Salvador.
The USD 30m loan agreement for the Providencia Solar joint venture was signed in the presence of Rémy Rioux, Chief Executive Officer of AFD, and the Chief Executive Officer of IDB , Luis Alberto Moreno.
This project combines the expertise of France’s Neoen , El Salvador’s Almaval and Spain’s manufacturer TSKvia a joint venture. It will develop the local electricity supply at a competitive cost, while reducing greenhouse gas emissions.
Large-scale solar project
With a total capacity of 100 MWp, the new Providencia Solar power plant will supply electricity equivalent to the annual consumption of 176,000 inhabitants. It will comprise two substations: Antares, a 75 MWp plant, and Spica, a 25 MWp plant. Its commissioning is scheduled for May 2017.
The total project cost is estimated at USD 150m, with USD 30m of financing from Proparco, including a USD 12m AFD subparticipation, USD 57.7m from the Inter-American Development Bank (IDB) and USD 30m from the Canadian Climate Fund syndicated by IDB.
International development of French expertise
Neoen is a young French company, set up in 2008, with recognized technological expertise in renewable energy solutions. It mainly operates in the solar and wind energy sector in France. The company has recently developed Europe’s largest photovoltaic farm, which is located in Cestas in the Gironde region (300 MW).
Proparco’s financing will support the enterprise's international development.
Structuring a new industry in El Salvador
It is El Salvador’s first solar power plant and will diversify the country’s energy mix, which is still highly dependent on fossil fuels (49%). It is estimated that the solar energy generated will replace the equivalent of 163,800 MWh of thermal energy every year, while avoiding annual greenhouse gas emissions by 39,800 tons of CO2.
This project is a major step in El Salvador’s energy transition. It will bring a new technology to the country and structure the solar industry with a view to the development of new projects (150 additional MW planned by 2017). It meets the objective of the Government of El Salvador to produce clean energy and will contribute to the transfer of know-how in a high-potential sector in the country. The initiative will also prepare the public authorities in the renewable energies sector for negotiations with private operators.
Support for local development
The solar power plant, which is located in the La Paz department 40 km from the capital, will contribute to El Salvador’s economic and social development by increasing access to electricity for the population. Furthermore, the communities neighboring the power plant will benefit from major social impacts, as 3% of the income from the Antares power plant will be invested in local development projects.