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The Finance and Special Budget Committee issued a favorable opinion for the approval of a US$9.68 million loan from the Kuwait Fund for Arab Economic Development (KFAED). These funds would be used for the San Matías Photovoltaic Solar Plant Project in the municipality of La Libertad Norte, La Libertad Department.
The financing amounts to three million Kuwaiti dinars, equivalent to US$9,689,609.51, and aims to support the construction of a new solar power plant. The loan had already authorized by the Legislative Assembly on june 10, so the Finance Committee’s favorable opinion represents a further step toward securing the project’s financing.
According to Marlon Herrera, Director of Investment and Public Credit at the Ministry of Finance, the plant would contribute to strengthening the country’s energy security by incorporating a renewable source into the electricity generation mix. It would also allow the country to meet part of its national demand and reduce its dependence on hydroelectric generation during the dry season.
The project also includes environmental benefits. It is estimated that the plant will generate approximately 20,000 MWh annually and reduce carbon dioxide emissions by up to 13,000 tons by producing electricity from solar power.
The investment includes various works necessary to bring the plant online. These include site preparation and access roads, the installation of ground-mounted photovoltaic modules or panels, and the construction of inverter and transformer stations.
The project also includes the construction of an electrical substation with two transformers, as well as the necessary infrastructure to connect the plant’s energy production to the national grid. The project will also encompass the buildings required for control and operation activities. From an economic standpoint, the project also aims to generate employment opportunities during its implementation and contribute to the development of energy infrastructure. According to the Ministry of Finance, the initiative is geared towards providing clean and sustainable energy for industry and communities, while simultaneously strengthening the country’s capacity to address risks related to climate change.
The financing from the Kuwait Fund would have a term of up to 25 years, including a three-year grace period, and a fixed annual interest rate of 2.5%.
With the favorable ruling, the US$9.68 million loan advances through the legislative process to finance infrastructure that seeks to expand renewable electricity generation, meet national demand, and diversify the sources used to produce energy in El Salvador.
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