El Salvador, December 23, 2019 —International Finance Corporation (IFC), a member of the World Bank Group, has approved an $85 million dollar investment to Energía del Pacífico (EDP) in El Salvador, to develop the first integrated Liquefied Natural Gas (LNG) to Power project, the largest private sector investment in the country.
The project will have a high development impact for El Salvador and the region, creating permanent, high-quality jobs, diversifying the country’s energy matrix, reducing fluctuations, making electricity more affordable and fostering long-term sustainable economic growth. Moreover, the Acajutla LNG Power project will have positive environmental effects by displacing carbon and oil-based energy generation, thereby reducing CO2 emissions.
Luc Grillet, IFC Senior Manager for Central America and the Caribbean, stressed the importance of the Acajutla LNG project for the country’s economic growth and sustainable development, and the impact for the rest of the region, as it will make it possible for El Salvador to export energy through the SIEPAC transmission system that connects Central America.
The project is comprised of a 378-megawatt (MW) natural gas-fired power plant, a floating storage regasification unit (FSRU), and an approximately 44-kilometer electric transmission line that will strengthen the country’s electric grid through a connection with SIEPAC. It is scheduled to be operational by the end of 2021.
The greenfield project will be majority-owned by Invenergy, a leading US power developer, while the initial developer of the project, Quantum Energy, remains a minority shareholder. Wartsila, the EPC contractor for the power block, will operate the power plant, while Shell will supply the LNG, both under long-term contracts.
“Energía del Pacífico is a transformational project for El Salvador and the entire region – a shining example of the enormous opportunity that can be created, despite prior obstacles, when private initiatives have strong government support,” said Michael Polsky, Invenergy Founder and Chief Executive Officer. “Leveraging our decades of development, engineering, finance, construction and operating experience, Invenergy is uniquely positioned to lead this partnership and execute this complex project.”
“IFC worked hand in hand with Energía del Pacífico and its shareholders, and through our expertise gained from our leading role in various LNG-to-Power projects across the world, IFC played a catalytic role in ensuring the bankability of the project and mobilizing debt from other lenders,” stated Adil Marghub, Regional Industry Head for Infrastructure and Energy at IFC.
IFC committed an 18-year project finance A Loan of up to $85 million, an 18-year interest rate hedging facility covering $105 million of senior debt, and a funded mobilization package of $572 million with other global financial institutions like the Overseas Private Investment Corporation, the Inter-American Development Bank and KfW/Finnvera.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
About Invenergy
We are innovators building a sustainable world. Invenergy and its affiliated companies develop, own, and operate large-scale sustainable energy generation and storage facilities in the Americas, Europe and Asia. Invenergy's home office is located in Chicago, and it has regional development offices in the United States, Canada, Mexico, Colombia, Japan, Poland and Scotland. Invenergy has successfully developed more than 24,000 megawatts of projects that are in operation, construction or contracted, including wind, solar, and natural gas power generation facilities as well as advanced energy storage projects. For more information, please visit www.invenergyllc.com .
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