The Inter-American Development Bank (IDB) has announced a $200 million Conditional Credit Line for Investment Projects (CCLIP), as well as an initial $70 million loan, to support the development of sustainable rural electrification in Peru’s Amazon region.
The financing is aligned with the IDB Group regional coordination program Amazonia Forever, the bank said, and was approved by IDB’s board of executive directors under the Multiple Works Loans category.
Renewable energy access
The initiative will seek to provide renewable energy access to 7,600 rural households and over 30,000 people across 25 communities in the Loreto and Amazonas departments, in turn helping to ‘drive sustainable development in the area’, the IDB said.
Some eight of these communities are home to Indigenous Peoples, with many residents gaining access to electricity for the first time, as well as training on how to use it efficiently and productively.
The project includes efforts to enhance services at Peru’s General Directorate of Rural Electrification of the Ministry of Energy, and training for Electro Oriente utility staff to operate and maintain solar power and battery storage systems.
‘Vulnerable area’
‘The Amazon is Peru’s most vulnerable area because of limited access to basic services, including electricity,’ the IDB noted. ‘The first loan will help close this gap in access to energy, especially renewables, that hinders sustainable development in the region.
‘Specifically, the program will provide 25 rural locations with access to reliable and environmentally sustainable electricity through hybrid mini-grids that integrate solar energy and battery storage. It will also improve project management to close gaps faster and ensure the sustainability of interventions.’
The first $70 million loan to be issued as part of the initiative carries a 17-year repayment term, a 6.5-year grace period, and an interest rate linked to the Secured Overnight Financing Rate (SOFR). Partners in Peru are set to contribute an additional $18 million to support the programme.
The Inter-American Development Bank (IDB), a member of the IDB Group, was founded in 1959 and supports public sector initiatives in 26 countries. Read more here.
