IIC Approves US$7.2 Million for Clean Energy in Peru
Hydropower plant will meet country’s growing electricity demand by generating renewable energy
Washington, D.C., December 4, 2012 — The Inter-American Investment Corporation (IIC) approved a loan of up to US$7.2 million to Empresa de Generación Eléctrica Canchayllo S.A.C. (EGECSAC) to develop, build, and operate a run-of-the-river hydropower plant on the Pachacayo River in the department of Junín, in central Peru.
The plant will have 5.26 MW of installed capacity and generate approximately 38 GWh of clean energy annually. The company has a concession agreement with the Peruvian government that allows it to sell the energy it generates at a fixed price over a 20-year period. The total cost of the operation will be approximately US$11 million.
“We are very grateful to have received IIC financing for this first renewable energy project with generating capacity of fewer than 20 MW,” said José García Herz, general manager of Cascade Hydro Power, EGECSAC’s majority shareholder. “We have three projects of this type scheduled to begin construction in late 2013. With them, we hope to become Peru’s leading renewable energy company.”
“The operation will have a positive impact on the Peruvian economy, since it will provide for the generation of low cost renewable energy, increase the share of renewable energy in the country’s energy supply, and reduce the impact on the environment,” noted Olga Lucía De Narváez, IIC investment officer in charge of the operation. “The new hydropower plant will also help balance energy supply and demand nationwide and in the Junín region, in addition to creating jobs for the Canchayllo farming community.”
Energy demand in Peru has been rising in recent years due to the growth of the economy and could increase by as much as 65% between 2011 and 2018. The national electrical grid will need an additional 3,300 MW to 5,300 MW over the next six years to keep pace with the country’s energy demand.
EGECSAC is a new company established to generate and sell electric power. It is part of a corporate group established in the United Kingdom that develops, builds, and operates electric power plants in Latin America.
About the IIC
The IIC, a member of the Inter-American Development Bank (IDB) Group, promotes private-sector development in Latin America and the Caribbean with a focus on small and medium-sized enterprises (SMEs). We help companies streamline management processes and provide them with financing in the form of equity investments, loans, and guarantees. In 2011, the IIC reached the symbolic one-billion-dollar mark in disbursements of own and third-party funds. Throughout our history, we have benefited more than 1.6 million SMEs in Latin America and the Caribbean. For additional information on the IIC’s activities, visit www.iic.org.
Contact: Olga Lucía De Narváez
Telephone: +57 (1) 325-7052 in Bogotá