IDB partners with Nordic Development Fund to finance energy efficiency projects in Central America
EUR 1.5 million to be provided for companies in the next two years to finance feasibility studies and small scale investments in clean technologies
The Inter-American Development Bank (IDB) is partnering with the Nordic Development Fund (NDF) to launch an EUR 1.5 million investment program to support companies in Central America to adopt clean technologies and improve their energy efficiency.
The program, which will target companies in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, will provide grants to finance energy audits and clean-energy feasibility studies that will help companies identify concrete investment opportunities for climate-friendly improvements.
“Although the benefits from increased use of renewable energy and improved energy efficiency are easily demonstrated, several barriers continue to impede more efficient energy use in the region,” says NDF Country Program Manager Hannu Eerola . These barriers include lack of incentives and awareness of the economic and environmental benefits, and lack of adequate financial instruments to support energy efficiency and renewable energy technologies.
It is hoped that the project can prompt participating companies to invest more than USD 15 million in energy efficiency improvements over the next two years, potentially generating a reduction in greenhouse gas emissions of over two million metric tons.
“The power of this grant fund lies in its potential to persuade CFO’s to make big investment decisions, so it can be a potent tool to increase investment in clean energy,’’ said Kelle Bevine , Chief of Strategy at the IDB’s Structured and Corporate Finance Department, which will be executing the program.
“Energy efficiency is a low-cost source of financial savings and emissions reductions, yet opportunities for investing in energy efficiency with existing, proven technologies are still largely unexploited in Latin America and the Caribbean” added Patrick Doyle , IDB project team leader.
This program will allow companies, for example, to save on their utility bills through measures such as better insulated buildings, efficient appliances and lightning. It will also identify opportunities for on-site, self supply renewable energy projects. Potential clients include airports, hotels, municipalities, utilities, schools, agricultural processors, and renewable energy plants.
