El Salvador’s first solar power plant launched: Partnership between PROPARCO, France’s Neoen and Inter-American Development Bank
, represented by its Chief Executive Officer Grégory Clemente, and
(Inter-American Investment Corporation), 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 TSK via a joint venture. It will develop the local electricity supply at a competitive cost, while reducing greenhouse gas emissions.
Rémy Rioux, Chief Executive Officer of AFD and Luis Alberto Moreno, Chief Executive Officer of IDB
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.
The European Commission and the development finance institutions of Member States step up cooperation to address new sustainable development challenges
Brussels, 25 May 2016 – Today, the European Commission, represented by the European Commissioner for International Cooperation and Development, the DGs DEVCO and NEAR, and the national financial institutions for development of Member States - Agence Française de Développement (AFD) of France, the KfW Bankengruppe (KfW) of Germany, the Cassa Depositi e Prestiti (CDP) of Italy and the Agencia Española de Cooperación Internacional para el Desarollo (AECID) of Spain - have come together to agree on further enhancing co-operation, coordination and dialogue on financing policy and investments.
The development actors present share the challenge of fostering the financing and implementation of the new international framework for sustainable development and climate action that the United Nations adopted in 2015 in New York, Paris and Addis Ababa. Boosting growth, promoting socio-economic development, gender equality and political stability are among their important objectives globally as well as in the European neighbourhood.
This informal cooperation framework is open to any other EU national financial institution for development willing to become an ever more active partner in the EU’s frameworks for blending development grants and loans.
The aim is to reinforce the impact of each institution's work and supporting partner countries more effectively in their development efforts by better leveraging financing flows, public and private, and thereby achieving more tangible results on key common priorities. The enhanced cooperation will in particular focus on the following:
- Piloting innovative and high-impact approaches such as programmatic and policy based lending approaches helping to bridge investment finance with concrete support of sound policies and good governance; flagship projects with high visibility and impact; and the exploration of new sectors and themes for joint projects;
- Ensuring efficient practices in financial cooperation and building new coalitions of actors including the national and regional development banks and local authorities;
- Sharing risks in innovative ways;
- Scaling-up climate finance: facilitate implementation of the “nationally-determined contributions” brought forward for the Paris Agreement adopted at COP21, increase the number and policy-relevance of climate change projects in the regional investment facilities and promote the role and visibility of European contributions in the international climate finance architecture;
- Engaging the private sector by designing financing solutions which lift barriers to its participation;
- Communication and visibility.
In order to coordinate these priority actions, the Institutions will set up a structured dialogue, based on High-Level Meetings and technical level exchanges in order to share expertise and experiences at operational level.
European Commissioner for International Cooperation and Development, Neven Mimica said: ‘Realising the vision of the new global sustainable development and successfully addressing the root causes of irregular migration requires much strengthened international efforts, including stronger involvement of private investments. National development banks will play an important role in these efforts. I am delighted therefore that with today's meeting we agreed on an enhanced cooperation framework that allows us to learn from each other and reinforce our strategic cooperation.’
Dr. Norbert Kloppenburg, Member of KfW’s Executive Board stated: ‘I welcome this partnership which offers a sound framework for the EU and the development financiers of the EU Member States to explore new and effective ways to mobilize private sector funds and bring development and climate finance to scale. This is in line with our common development agenda.’
‘Our relation with the European Commission and European sister institutions is at the heart of AFD’s partnership strategy. This partnership, combined with the blending instruments that we have developed collectively and the relations we are building with regional and national development banks abroad puts us at the forefront of development and climate finance.’, added Philippe Orliange, Executive Director for Partnerships, Strategy and Communication at AFD.
With regard to the priority of engaging the private sector Cristina Juarranz, Director for multilateral, horizontal and financial cooperation at AECID pointed out: “The provision of quality financial services at a reasonable cost is widely regarded as an important factor for development and increased welfare of families. There is still much to be done and development cooperation must continue to assume a significant role in that, by supporting the access of all people to quality financial services tailored to their needs and reasonably affordable.’
Mr. Bernardo Bini Smaghi, Director of Business development in charge of Cdp Group Cooperation Development initiatives announced: ‘We look with great interest to this partnership that is particularly timely for us, considering that Cdp Group is now entitled by law to play the role as the Italian Financial Institution for Development Cooperation. Thanks to this partnership we will have the opportunity to share experiences and knowledge with the Commission and the other FIs and to discuss specific important topics such as migration and the private sector, trying to identify new financial solutions - within the Blending facilities framework - in order to better address the new challenges in front of all of us.’
AFD: Magali Mévellec – phone: + 33637392607 – email: email@example.com
AECID: Ruben Lopez Pulido – phone: +34 91 583 8137 – email: firstname.lastname@example.org
CDP: Press Office Cdp Group – phone: +39 06 4221.4000 – email: email@example.com
KfW: Sonja Höpfner – phone: +49 69 7431 4306 – email: Sonja.Hoepfner@kfw.de
The Spanish Agency for International Cooperation for Development (AECID) is the main management body of the Spanish Cooperation, aimed at poverty reduction and sustainable human development. According to its statute, the Agency was created to promote the full realization of development, conceived as a fundamental human right, the fight against poverty being part of the construction process of this right. To do this, it follows the guidelines of the IV Master Plan for Spanish Cooperation, in line with the international agenda and paying special attention to three transverse elements: gender, environmental quality and respect to cultural diversity. www.aecid.es/EN
About the Agence Française de Développement
Agence Française de Développement (AFD), a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 75 offices and finances and supports projects that improve living conditions for populations, boost economic growth and protect the planet. In 2015, AFD earmarked EUR 8.3bn to finance projects in developing countries and for overseas France. www.afd.fr
About Cassa Depositi et Prestiti
Cassa Depositi e Prestiti Group is the national promotional institution that has supported the Italian economy since 1850. It finances public sector investments, supports international cooperation and is a catalyst for development of the country’s infrastructure. It supports Italian businesses by favoring innovation and growth, and promoting exports and international expansion. It contributes to the Italian real estate market as the principle operator of social and affordable housing and has recently been entitled to act as the Italian Financial Institution for Development Cooperation. www.cdp.it
KfW is one of the world´s leading and most experienced promotional banks. Established in 1948 as a public law institution, KfW is owned 80 per cent by the Federal Republic of Germany and 20 per cent by the federal states (“Länder”). KfW Development Bank is Germany’s leading development bank and an integral part of KfW. It carries out Germany´s Financial Cooperation (FC) with developing countries on behalf of the Federal Government. The 600 personnel at headquarters and about 200 specialists in its 70 local offices cooperate with partners all over the world. Its goal is to combat poverty, secure the peace, protect the environment and the climate and make globalisation fair. KfW is a competent and strategic advisor on current development issues. w ww.kfw.de