Credit line

IDB approves $1.14 billion line of credit to Argentina to decarbonize its energy sector

IDB PRESS RELEASE
July 27, 2022

The Inter-American Development Bank (IDB) has approved a $1.14 billion conditional line of credit for investment projects aimed at decarbonizing Argentina’s energy sector.

The IDB Group remains committed to supporting Argentina’s development agenda with projects that have a direct development impact. Under the line of credit, the IDB authorized initial financing of $200 million. It will be supplemented by an additional €100 million from the French Development Agency and €100 million from the European Investment Bank.

The first operation aims to help decarbonise Argentina’s electricity industry by significantly reducing its greenhouse gas emissions. It will also help expand and modernize electricity transmission networks, bringing tangible benefits to Argentine citizens.

Argentina will use these funds to upgrade transmission systems in different provinces. It will also prioritize projects that reduce greenhouse gas emissions by increasing renewable energy transmission capacity, reducing technical losses and decommissioning diesel power plants.

These investments will strengthen the quality and reliability of the service to better meet growing demand and increase the electrification of energy consumption, leading to greater productive development in the Argentine provinces.

Each intervention is designed to include measures to ensure resilience and adaptation to climate change. The program will also allocate funds for reforestation with native species in areas to be defined with the forest authorities of each province.

The initiative will also support work to develop a gender and diversity policy for the Federal Electric Transportation Trust Fund, as well as an action plan for transmission projects to drive participation. of women in industry (which is currently less than 20%) and to mitigate gender. violence-based violence at all stages of the project.

The program aligns with Vision 2025, the IDB’s blueprint for recovery and inclusive growth in Latin America and the Caribbean. This program focuses on three of the five key pillars of Vision 2025: digitalization, climate change, and gender and inclusion.

The $200 million IDB loan has a repayment term of 25 years, a grace period of five and a half years and an interest rate based on SOFR.

About the IDB

The Inter-American Development Bank is dedicated to improving lives. Founded in 1959, the IDB is a major source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.