Proparco grants $83M to support renewable energies and small agri-businesses in Central America
published on 27 November 2018
As it celebrates its 40th anniversary in Mexico, Proparco has signed three credit facilities that highlight its continued commitment to contribute to the economic, social and environmental development of the region. The financing for these 3 projects is in addition to the $1 billion already granted by Proparco in Mexico, Central America and the Caribbean over the past 12 years.
A long-term partnership to support agricultural SMEs in Latin America
A $20 million loan has been signed with the Latin American Agribusiness Development Corporation, a financial institution specialised in financing small and medium-sized agribusinesses in Latin America. LAAD specifically targets companies committed to contributing to the economic and social development of the community and provides them with suitable financing options, which are often not readily available from local commercial banks.
Around 40 agricultural SMEs in Mexico will benefit from Proparco’s new funding and approximately 800 direct and indirect jobs will be created and maintained.
This is Proparco’s third project with LAAD in the last 8 years, which testifies to the long-standing partnership between the two institutions and the needs of the local agricultural sector. Proparco first granted a $15 million loan to LAAD in 2010, followed by a second $20 million credit line in 2015. This is again testament to Proparco’s sustained commitment to support SMEs contributing to economic, social and environmental development through local financial institutions.
An essential contribution to El Salvador’s transition towards renewable energies
A $28 million loan was also granted by Proparco to the French solar and wind energy specialist Neoen for the construction of a 140MWp solar power plant in Salvador. The Capella Solar power plant also benefits from funding from lead arranger FMO, the Dutch Development Bank, and IDB Invest, the private sector arm of the Inter-American Development Bank, who also each contributed $28 million loans.
This new solar farm, one of Central America’s largest, will result in an annual saving in emissions of 110,000 t CO²e. More than 600 direct and indirect jobs will be supported for the construction and operation of the power plant. The project will also support the local community by contributing 3% of the project’s revenue to social development programmes.
This is the second solar power plant financed by Proparco and developed by Neoen in the country after the 101 MWp Providencia Solar project, which was the nation’s first-ever commercial-scale photovoltaic power plant. Both solar power plants contribute significantly to El Salvador’s ambitious energy strategy to increase the share of renewable energy in the country.
A new boost to Central America’s renewable energy projects
Finally, the third credit line signed today consists of a $35 million loan granted to Banco Ficohsa to further support Honduras’ largest bank in developing its portfolio of loans to renewable energy projects in the country. It will contribute to local efforts which intend to improve access to electricity in rural areas and will support more than 3,000 direct and indirect jobs over the coming years.
This is Proparco’s second financing to Banco Ficohsa after an initial $20 million loan in 2012, which was already earmarked for renewable energy and energy efficiency projects.
Proparco’s financial support is particularly important considering the lack of long-term resources available to local companies looking to develop renewable energy projects in Honduras.
40 years of support to development
These three new projects were signed as Proparco celebrates its 40th anniversary in Mexico, where its regional office covers North & Central America and the Caribbean. Clients and partners of Proparco gathered at the French Ambassador’s Residence, in order to acknowledge the important contribution of the private sector to the United Nations’ Sustainable Development Goals.
Over the past 12 years, Proparco has committed over $1 billion in the region to financial institutions, SMEs and larger businesses creating jobs, fighting climate change and improving access to essential goods and services. The new projects signed today are in line with Proparco’s ambitious strategy to double its financial commitments in order to triple its impact on sustainable development.
