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The project concerns the construction of the Emboscada substation and relevant power transmission lines in Paraguay.
The aim is to improve the electricity transmission grid in Paraguay, in Metropolitan and Central Systems areas that represent a large part of the country's electrical consumption. The project will improve the quality, security and reliability of the electricity supply and enable the connection of new system users.
The Project comprises the construction of a substation and relevant connecting lines to improve the electricity transmission grid in Paraguay, in Metropolitan and Central Systems areas that represent a large part of the country's electrical consumption, improving the quality and reliability of electricity supply and enabling the connection of new system users. The project contributes to security of supply.
This operation directly contributes to the Global Gateway Investment Agenda (GGIA) and EU priorities for Latin America and Paraguay, by supporting ANDE's ambitious investment plan which contributes to upgrade and reinforce its electricity infrastructure. It is a strategic project that showcases the European support to the green transition in the region, and that paves the way for other EIB's key investments in the electricity sector in the country and in the region, in line with European strategic priorities. By strengthening the Paraguayan transmission infrastructure, this project reinforces the grid and strengthens transmission and generation capacity in Paraguay as well as cross-border transfer capacity, hence having a regional dimension. The project also contributes to the EU's regional MIPs (Multiannual Indicative Programme) for the Americas and the Caribbean, to the specific MIPs for Paraguay, and to the objectives of the EU's Green Deal. It also supports the EIB's lending priority objectives on Energy and Climate Action and it contributes to the climate goals laid out in the EIB Climate Bank Roadmap.
The operation also addresses market failures related to security and stability of electricity supply, creating a public good with wide benefits on the population. The economic rate of return of the Project is deemed to be Excellent and fully justifies the investment from an economic perspective. The operation is expected to generate broader social benefits through improved system efficiency, security of supply, and regional decarbonisation. The social benefit is rated Excellent. The Borrower has solid experience in high-voltage transmission infrastructure and operates as Transmission and System Operator. The Bank considers the Borrower qualified to implement the Project.
The non-reimbursable resources provided by the European Commission and blended with the loans from the EIB and the Inter-American Development Bank (IDB, who is managing them) will support ANDE in improving its Environmental and Social procedures, in line with European and EIB standards and requirements. Additionally, the competitive terms of the EIB financing, plus the non-reimbursable resources of the European Commission, will help to make the project financially viable for the Promoter.
The improvement of electrical infrastructure will enable the consumption of renewable energy. Therefore, the project is expected to have positive externalities in terms of carbon emissions and contribute to the sustainable development of Paraguay. The EIB will require the promoters to take all the requisite measures to ensure that the project complies with national legislation and the EIB's Environmental and Social Standards.
The promoter will ensure that implementation of the project will be done in accordance with the EIB's Guide to Procurement.
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