Inter-American Development Bank ramps up renewables investments

Berlin geothermal power plant of La Geo in El Salvador (source: Enex)

Alexander Richter 25 Apr 2012

At its annual meeting in March, the Inter-American Development said it expected to approve more than $700 million in long-term financing for private sector renewable energy projects. While the bank seems to put a focus on wind, solar and hydro power, geothermal is also in the picture.

“The Latin America and the Caribbean region is committed to reducing its greenhouse gas footprint,” said Hans Schulz, head of the IDB’s Structured and Corporate Finance Department, which is responsible for financing large-scale projects in the private sector.

“Several countries are beginning to develop their potential for wind, geothermal, bio energy production and solar energy, often through private sector leadership,” Schulz said. “The IDB provides access to tailored long-term financing, not readily available in local capital markets for these types of projects.”

Last year, the IDB approved $736 million in financing for private sector environmentally-friendly projects, compared with the $663 million invested by the bank between 2000 and 2010.

The increase reflects both an increase in demand from the 26 governments the bank counts as its borrowing members and a strategic shift that calls for 25 percent of the bank’s lending portfolio to support climate change and environmentally-friendly initiatives, such as renewable energy.

As part of the meeting, the IDB and the Japan International Cooperation Agency signed a framework agreement that will provide up to $600 million in financing for renewable energy and energy efficiency projects in Central America and the Caribbean over the next five years.

At the meeting the IDB also agreed to join forces with the Asian Development Bank on strengthen trade and investments.

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Source: Environment News Service