IDB approves $220 million loan to Ecuador for the electricity distribution program

The Inter-American Development Bank (IDB) announced approval of a $220 million loan to Ecuador to finance the strengthening of Ecuador’s National Electricity Distribution System (SND), in order to support a change in the country’s energy matrix and to improve the delivery of quality electricity service to residential customers.

The specific objectives of this loan program are to: contribute to strengthening the SND, to operate at 220 Volts on the low-voltage grid; increase the reliability of the SND; and contribute to developing a strategy to replace consumption of liquefied petroleum gas (LPG) with electricity for residential customers. The IDB will work closely with Ecuador’s Ministry of Electricity and Renewable Energy (MEER) to implement this program.

This program’s primary component will finance works in Ecuador’s National Electricity Distribution System (SND), to address Ecuador’s projected electricity demand, throughout the strengthening of sub transmission lines and the distribution network.

The program’s second component will fundthe planning for implementation of a strategy to migrate from Liquefied Petroleum Gas (LPG) to electricity in Ecuador’s residential sector.

Program’s third component will finance various activities related to the strengthening of the Electricity Distribution Enterprises (EDE), including: implementation of a program to train EDE personnel involved in program execution; and support for the EDEs in works execution.

The $220 million IDB loan is for a 25-year term, with a 48-month disbursement period and an interest rate based on LIBOR. The loan includes $50 million from the China Co-financing Fund for Latin America and the Caribbean as well as a local counterpart contribution totaling $27.4 million. The entire loan package for the project will total $274.4 million.