IDB to finance 1|890MW Salto Grande hydroelectric modernisation

The Inter-American Development Bank (IDB) has approved a Conditional Credit Line for Investment Projects (CCLIP) of up to $800 million to support the modernisation of the 1,890MW Salto Grande Binational Hydroelectric Complex (CHSG) in Argentina and Uruguay.

The complex on the Uruguay River consists of two powerhouses, one on the Argentine side and another on the Uruguayan side, with a landfill in the middle. Each machine house contains seven turbine-generating units, with a total average annual generation capacity of 8,546GWh.

The objective of the work is to contribute to the decarbonisation of the interconnected electricity system and foster regional sustainable development, which are crucial for both countries’ efforts to advance their climate commitments, IDB said.

The First Individual Loan Operation under this CCLIP is for up to $75 million for each country (up to $150 million total). This operation will contribute to ensuring the reliability and availability of CHSG, extending its useful life and its environmental and social sustainability. The project will benefit more than 17 million users of the interconnected electricity systems of Argentina and Uruguay.

CHSG was the first binational project in the region, initiating the process of electrical systems integration in the Southern Cone, which paved the way for further binational projects, IDB said. Argentina and Uruguay are members of the Energy Integration System of the Southern Cone Countries, whose goal is to promote regional power integration using CHSG as a cornerstone.

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The loan will help upgrade CHSG’s infrastructure and finance its institutional strengthening, with a focus on digitalization, inclusion and regional development.

In terms of institutional strengthening, it will improve digital corporate management by incorporating cybersecurity measures and conducting technical studies to support the execution of the operation.

It will also prepare the next stage of modernisation and training for CHSG staff on technical issues, management, promotion of gender policies, inclusion of persons with disabilities, and prevention of sexual and workplace violence and harassment.

In addition, the loan will promote local productive development and job creation through the strengthening of regional suppliers’ capacities.

The IDB has been supporting CHSG’s modernisation since 2019, through the Modernization of the Salto Grande Binational Hydroelectric Complex operation currently under execution, for a total of $80 million ($40 million per country).

The Conditional Credit Line for investment loans in the energy sector will be available for 15 years (for an amount of up to $800 million), through at least three individual lending operations. The first loan approved under this credit facility will be for up to $150 million, with a repayment term of 23.5 years, a disbursement period of six years, a grace period of seven years and an interest rate based on the Secured Overnight Financing Rate (SOFR).

IDB provides long-term financing for economic, social and institutional development in Latin America and the Caribbean. IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

Originally published on hydroreview.com