WASHINGTON, December 15, 2015 – Today, the World Bank Board of Directors approved US$120 million to support the Dominican Republic’s efforts in improving the financial performance of the three electricity distribution companies (EDEs) in selected circuits and increasing electricity access in the targeted communities.
"This funding supports two cornerstones of the strategic plan of the Dominican Corporation of State Electricity Companies which aim to reduce losses and improve the efficiency of the distribution companies," said Ruben Jimenez Bichara, Vice President of the Dominican Corporation of State Electricity Companies (CDEEE). "These resources will help find a holistic solution to the country’s electricity problems”.
The energy sector is critical for growth in the DR and access to electricity is considered the biggest obstacle to doing business in the country. Despite many reforms, the DR has one of the most widespread rolling blackouts in the region due to ineffective metering, billing and collecting system. More than half of the clients of the three regional distribution companies (EDEs) pay a fix amount as they are not metered, and the power sector deficit has grown from US$700 million in 2010 to US$1.3 billion in 2014, about 2 percent of GDP.
“By increasing access to reliable electricity in poor communities, this project not only aims to improve the quality of life in poor neighborhoods, but also address a key bottleneck to boost inclusive growth in the country,” said Sophie Sirtaine, World Bank Country Director for the Caribbean. “This funding will allow scaling up a successful project which already benefited more than 100,000 Dominicans in the metropolitan area of Santo Domingo”.
This project is aligned with the National Comprehensive Plan for the Electric Power Sector and the electricity pact which is being negotiated to provide all Dominicans with reliable, competitive and sustainable electricity services within the next 15 years.
Specifically, the Distribution Grid Modernization and Loss Reduction project will:
- Rehabilitate 1,003 km of distribution networks and upgrade electrical interconnection of more than 120,000 customers in priority areas;
- Reduce commercial losses by installing more than 138,000 remote meters and converting over 73,000 illegal users into regular clients;
- Increase the number of hours of electricity supply to 24h service to all clients in all intervened circuits.
The project will be implemented by the CDEEE and will benefit over one million Dominicans mainly located in the districts of Santo Domingo, San Cristóbal, Santiago, La Vega, Puerto Plata, and San Francisco de Macoris. It will be financed under a US$120 million loan over five years with a 20 year maturity period and a grace period of 4 years. This will be complemented by additional financing from the Inter-American Development Bank, the OPEC Fund for International Development and the European Investment Bank.