January 5, 2018
Finnfund to finance 10 solar power plants in El Salvador
Finnfund has provided a USD 15 million loan for the construction of ten solar power plants in El Salvador, Central America. Power plants are expected to be fully operational in 2019. Together, they will have a capacity of 100 megawatts.
The company responsible for the project is Bosforo Ltda de CV, owned by two companies with long expertise in the energy sector: AES Soluciones, Ltda de C.V., part of AES El Salvador and a subsidiary of The AES Corporation, an international energy company, and CMI Solaris Investments, S.L., owned by a conglomerate Corporación Multi-Inversiones (CMI).
The total investment in the project is approximately USD 160 million. Finnfund’s senior loan for the project is USD 15 million.
Once ready, each of the ten power plants will generate sufficient electricity for nearly 30,000 rural households, which consume on average less than 65kWh/month. It is estimated that the project will decrease emissions by up to 175,000 tons of CO2 equivalent annually by substituting 250 GWh of less efficient thermal generation by fossil fuels.
Solar power plants will be located in poor rural areas where many residents are dependent on remittances coming from abroad, and illiteracy is common. Currently, the company has made an agreement in three municipalities in the eastern part of the country: Conchagua, El Carmen and Pasaquina. The construction projects and the community projects are carefully planned in close cooperation with residents. It is estimated that a labor force of up to 70 people will be employed throughout the initial two years of construction.
During the years, Finnfund has funded several companies in Central America, but this is the first investment in El Salvador.
”Solar energy in El Salvador fits well with Finnfund’s strategy. For us it is particularly important that the projects are taking place in poor areas which, in terms of development, have been left behind in many ways. We have paid special attention to cooperation with local communities,” says Jaakko Kangasniemi, CEO of Finnfund.
“Support from multilateral development financiers such as Finnfund along with our other senior lenders, OPIC, CABEI and FMO, has been a key factor in the successful development of Bósforo”, explains Abraham Bichara, CEO of AES El Salvador.
For more information:
Jaakko Kangasniemi, Managing Director, jaakko.kangasniemi(a)finnfund.fi, tel. +358 40 577 7676
Kirsi Pere, Communications Manager, kirsi.pere(a)finnfund.fi, tel. +358 40 620 9767
Arnaud Defrance, Investment Manager, arnaud.defrance(a)finnfund.fi, tel. +358 50 487 6966