KfW to provide $290m to CAF for geothermal projects in Latin America
Germany makes funding of $290 million available through CAF for geothermal projects in Latin America, either in the very early stage of development or the construction of plants.
In an announcement yesterday, the German Ministry for Economic Cooperation and Development (BMZ, German abbreviation) and CAF signed an agreement by which they shall promote the development of projects that will benefit, in the case of energy, countries such as Colombia, Ecuador, Peru, Bolivia, Chile and Mexico; meanwhile, benefits in the transportation sector shall be enjoyed by Latin America in general.
The agreement signed in Caracas for a total of EUR 350 million ($400 million) is for funding by German development bank KfW of credit lines to CAF – the development bank of Latin America during 2017.
The strategic alliance for the promotion of sustainable development in Latin America between CAF and KfW was deepened with the signing of an agreement in which better conditions will be offered for financing geothermal projects (EUR 250 million or $290 million).
“One of the objectives that we’re fulfilling with alliances, such as the one we have with KfW since 1977 and German authorities in general, is to improve financing conditions for member countries and to help them to be more efficient in the distribution of resources, which are limited. These contributions allow for progressing in the development of sectors that are highly impactful for productive transformation and competitiveness, such as renewable energies and urban transportation,” García explained.
The first credit line of EUR 250 million ($290 m) shall be allocated to lowering financing that CAF grants to geothermal projects in the region, whether for supporting excavations for measuring the potential of energy generation, or for the very construction of the geothermal plant. This credit line constitutes part of a program lead by KfW and CAF, in which other agencies also participate and which arose in 2013 in order to identify the potential of geothermal energy in Latin America. The countries with the greatest potential in South America are Colombia, Ecuador, Peru, Bolivia and Chile.