The Inter-American Development Bank (IDB), through the Banca Nacional de Desarrollo, has announced the approval of a loan for $9.3 million to promote private investment in the generation of renewable energy in areas of Colombia that are isolated or not interconnected to the national electricity grid.
About 60 percent of Colombia’s territory is not connected to the electricity grid, though most of this is sparsely populated, such as the Amazon region, and other rural or undeveloped areas. Still, approximately 1.8 million Colombians rely on limited and scattered localized power services. Through this IDB loan, private sector companies that supply and administer public electricity services, as well as providers of renewable energy technologies that have a history of experience and credit with mini-grids, will be able to expand their services.
By the end of the program in 2020, the program hopes that emissions of greenhouse gases will have been reduced by 67,900 tons as a result of its efforts.
The program is one of several mechanisms for public-private financing that the IDB has been promoting to increase private investment in renewable energy. The operation, which will use funds from the Climate Investment Funds, has a payout period of five years, with a 10.5-year grace period and an interest rate fixed at .75 percent. The implementing agency will be the Banco de Comercio Exterior de Colombia S.A. (Bancóldex).