WB/Argentina: Renewable Energy and Forest Conservation to Benefit One Million Rural Inhabitants

April 7, 2015

WASHINGTON, April 7th, 2015 – The World Bank Board of Executive Directors today approved three new projects for Argentina totaling US$265 million, focused on expanding access to renewable energy among isolated rural populations; preserving native forests through sustainable management benefitting those communities dependent on them, and protecting vulnerable natural areas.

“Through these projects we intend to close the service access gap between rural and urban inhabitants. By providing electricity to remote towns, protecting the native forests that are a source of income for Creole and indigenous communities, and preserving the biodiversity of the Gran Chaco, we contribute to the promotion of better living conditions among the poorest 40 percent of Argentines,” said Jesko Hentschel, World Bank Director for Argentina, Paraguay and Uruguay.

Renewable Energy for Rural Areas

Reaching those hardest to include is at the heart of the US$200 million “Renewable Energy for Rural Markets Project” (PERMER, in Spanish), the second stage of a program that brought alternative energy to 150,000 people in 15 provinces of the country. The expansion of this program will now serve to reach 725,000 people through the installation of solar panels, mini-networks and wind systems, as well as solar water heaters and stoves in scattered public schools and institutions.

“This program represents a successful social inclusion tool for those populations located in isolated areas or areas far removed from transportation and electricity networks, where market rules often dictate the convenience, or not, of connecting them to the electricity network. PERMER provides special attention to historically disadvantaged groups, giving them access to energy and providing a better quality of life,” said Mariana Matranga, Argentina’s Energy Secretary.

Protection of Biodiversity and Native Forests

Deforestation in Argentina is concentrated mainly in the Gran Chaco ecoregion, where 90 percent of the country’s wood products (such as carbon, wood and tannins) come from. Between 2006 and 2011 more than 1.5 million hectares of native forests were cut down due to the expansion of the agricultural frontier and illegal exploitation. The US$58.7 million “Native Forests and Communities” project will support the implementation of sustainable forest management plans and the development of productive projects that will benefit 150,000 small-scale producers and their families, most of them indigenous, living in Chaco, Santiago del Estero, Salta, Jujuy and Misiones provinces.

Additionally, the “Rural Corridors and Biodiversity” project —a US$6.2 million Global Environment Facility (GEF) grant — seeks to promote the comprehensive management of almost 1 million hectares located in the Gran Chaco, the Patagonian steppe and marine-coastal areas.

About the World Bank in Argentina

The World Bank partners with Argentina to promote opportunities for the poorest 40% of the population, with a program focused on expanding social inclusion and promoting sustainable development. The 2015/18 work plan focuses on the areas of education, health, transportation, environment and youth employment, among others. The current portfolio includes 24 projects and donations totaling US$5.5 billion.

PERMER II will be financed via a variable-margin, US$200 million loan, with a 35-year maturity period and a 4.5-year grace period. The US$58.77 million “Native Forests and Communities” loan matures in 32.5 years with a 7-year grace period. Lastly, the GEF donation totals US$6.29 million.

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