WASHINGTON, March 15th, 2018 – The World Bank (WB) Board of Executive Directors approved a new US$250 million guarantee today to foster private investment in the development of renewable energy in Argentina, with the intention of contributing to a cleaner energy matrix as well as mitigating climate change.
The World Bank guarantee will facilitate private investment in those projects falling under the Argentine Ministry of Energy and Mining’s RenovAr Program, via the Renewable Energy Fund (FODER, in Spanish). This initiative seeks to promote electricity generation with wind, solar, biomass, biogas and small hydropower systems, in order to help the Government of Argentina meet its target of having 20 percent of national electricity consumption coming from clean sources by late 2025. Currently, this number is only at 2 percent.
“After the successful experience of Rounds 1 and 1.5 of the RenovAr Program, we are proud to continue to have the support of the World Bank to reaffirm the path taken by our country with the aim of guaranteeing the diversification of the energy matrix and reducing climate change”, said Sebastián Kind, National Undersecretary of Renewable Energies.
This guarantee comes on top of the original guarantee that the World Bank granted to the first bids of the RenovAr Program in 2016 (known as Rounds 1 and 1.5). This new operation supports Round 2 of late 2017, which is expected to mobilize private investment representing nine times the value of the guarantee.
“We partner with Argentina once more in the creation of an enabling environment for leveraging private sector renewable energy financing, in an effort to promote sustainable use of its natural resources and help the country meet its climate change mitigation goals”, said Jesko Hentschel, World Bank Director for Argentina, Paraguay and Uruguay.
Following the three bidding rounds, 147 projects were awarded throughout the country, most of them based on wind and solar energy, and are expected to generate 4,466 megawatts (MW). Their implementation will contribute greatly to the realization of the country’s carbon dioxide emissions reduction goal for 2030, as it will prevent the emission of 7 million tCO2 per year. Likewise, the RenovAr Program will bring health benefits for the population, by reducing the air pollution resulting from fossil fuels.
Boosted by World Bank guarantees, FODER has become a model for maximizing financing by attracting international private investment, while at the same time giving visibility to Argentina as an attractive market for the development of renewable energy.
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