Peru electrification funding includes small hydro

The World Bank has approved a US$50 million loan and a US$10 million Global Environment Facility (GEF) grant to promote rural electrification in Peru, including assistance to small hydropower.

The program is to be implemented over five years by Peru’s Ministry of Energy and Mines. It has five main components, including a small hydro generation financing facility to provide grid-connected plants with project financing during the construction and initial operation period.

The bank said March 7 that a trust fund is to be established for administration of subsidies to sub-projects and of loans awarded under a small hydropower generation financing facility.

The program also is to provide targeted subsidies to public and private electricity service providers that invest in rural electrification using conventional or renewable electricity sources. Other areas to be financed include technical assistance, a pilot program on productive electricity uses, and project management.

Peru government, other sources to provide funds

The US$50 million fixed-spread loan, from the World Bank’s International Bank for Reconstruction and Development, has a grace period of 10 years and a repayment period of 11.5 years. Peru’s government is to provide an additional US$51.45 million for the total US$144.55 million program, with another US$33.1 million to come from other sources.

GEF participation is to support full integration of renewable energy options, including small and mini-hydro grids and solar and wind systems, into all activities of the program as well as Peru’s future legal and regulatory framework.

For information, contact Ministry of Energy and Mines, Av. Las Artes Sur 260, San Borja, Lima, Peru; Tel/Fax: (51) 1-4750065.

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