- The €1 billion in financing will go to transmission and distribution projects as well as renewable energy initiatives across Central America.
- This flagship initiative under the EU Global Gateway Investment Agenda will foster regional energy integration and sustainability.
- The initiative has seen strong Team Europe cooperation with EU Member States, regional partners and private sector investors.
EIB Global, the international partnerships and development arm of the European Investment Bank (EIB), announced a new €1 billion financing initiative to strengthen power grid integration and clean energy across Central America at the CELAC-EU (Community of Latin American and Caribbean States) summit in Colombia today. This financing is in line with the EU Global Gateway Investment Agenda (GGIA).
The Electricity Integration of Central America lending envelope will support the construction and upgrading of transmission and distribution infrastructure and promote renewable energy generation in Costa Rica, Panama, Honduras, Guatemala, El Salvador and Belize. The operation aims to help the region advance its energy transition and decarbonisation goals, while improving access to reliable and affordable electricity.
Catalysing sustainable growth and regional integration
Through this initiative, the EIB will act as the EU investment catalyst for Central America’s electricity integration and just transition. The operation is expected to include five to six sub-operations – each ranging between €150 million and €350 million – and will be implemented through framework loans and investment loans with national utilities and regional institutions.
The EIB financing will contribute to the development of the Central American Regional Electricity Market (MER), created to facilitate electricity trade and integration between Panama, Costa Rica, Nicaragua, Honduras, El Salvador and Guatemala. The project supports the countries’ commitments under their Nationally Determined Contributions (NDCs) and is expected to have a climate action contribution of around 85%.
“The European Investment Bank is the climate bank, and a key player in Latin America and the Caribbean’s energy transition. This financing will deliver cleaner energy, a better connected grid and a more secure and better quality supply for millions of people,” said EIB Group President Nadia Calviño.
“The EIB’s financial backing for the integration of Central America’s power grids clearly demonstrates the European Union’s commitment to the region for promoting our shared priorities, to the green transition and to supporting renewable energy as a key priority in cooperation between our regions,” said President of the European Council António Costa.
“This investment shows Team Europe’s commitment to just, sustainable and inclusive development in Latin America and the Caribbean. In a turbulent and polarised world, Europe chooses to work together, promoting renewable energies that will improve the lives of millions of people and protect our planet. The integration of energy systems and interconnection with grids and key components of facilitating electricity trade. Europe will bring its added value: the high social and environmental standards that are central to our image and identity,” said Executive Vice-President of the European Commission for a Clean, Just and Competitive Transition Teresa Ribera.
“Central America has enormous potential to advance a cleaner and more secure energy future. Through this initiative, the EU, under Global Gateway, is supporting a stronger and more interconnected electricity system that will ensure more reliable energy supplies and benefit communities, businesses and the environment. This investment reflects our commitment to fair and sustainable growth, and to working together as true partners for a more resilient region,” said European Commissioner for International Partnerships Jozef Síkela.
“This initiative is a clear example of how the EIB works with its partners to turn regional cooperation into real progress for people and economies. These investments in stronger power grids and renewable energy will help Central America move towards a more secure, connected and sustainable energy future,” said EIB Vice-President Ioannis Tsakiris.
Team Europe and the impact of the EU-LAC Global Gateway Investment Agenda
This operation in part of the Latin America and the Caribbean component of the EU Global Gateway Investment Agenda. It is based on the agreements reached during the 2023 CELEC-EU Summit to improve connectivity, sustainability and partnerships between the regions. It reflects the Team Europe approach, which brings together EU institutions, EU Member States, development banks and private sector partners to deliver lasting benefits for the people and economies of Latin America and the Caribbean.
Aiming to improve the reliability and interconnection of national power grids, the initiative will enable increased renewable generation capacity, cut energy losses and increase the number of users with access to a clean and stable electricity supply. It will also create opportunities for European companies to join a competitive and fast-growing energy market.
Background information
About EIB Global:
The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that contribute to EU policy objectives.
EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner of the Global Gateway. It aims to support around €100 billion of investment by the end of 2027. EIB Global brings the EIB Group closer to people, companies and institutions through its offices across the world. Photos of EIB headquarters for media use are available here.
The EIB in Latin America and the Caribbean
The European Investment Bank has been providing economic support for projects in Latin America and the Caribbean since 2022, facilitating long-term investment with favourable conditions and providing the technical support needed to ensure that these projects deliver positive social, economic and environmental results. Since the EIB began operating in Latin America in 1993 and the Caribbean in 1978, it has provided total financing of more than €17 billion to support over 350 projects in 30 countries in the region.
EIB Global is a key partner in the implementation of the European Union’s Global Gateway Investment Agenda, supporting sound projects that improve global and regional connectivity in the digital, climate, transport, health, energy and education sectors. Investing in connectivity is at the very heart of what EIB Global does, building on the Bank’s 65 years of experience in this domain.