Lawmakers approve $83 million loan for Acelhuate River renewable energy project 

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By LatAm Reports Editorial Team

The funds will go to CEL for a renewable energy project. Borrowing debt from the start of 2024 amounts to $226 million.

The Legislative Assembly will approve the request of the El Salvadoran government to sign a loan with the Kingdom of Saudi Arabia to boost water, clean and renewable energy treatment.

According to the request of the Ministry of Finance, the $83 million that will be loaned will be transferred to the Executive Hydroelectric Commission of the Lempa River (CEL). The executive project is called “Installation of a biogas power plant on the Acelhuate River.”

The bet would be specifically in the Urbina River sector.

“The energy matrix of El Salvador is composed mostly of hydroelectric and geothermal sources. Solar, wind and gas energy have less involvement. In this sense, CEL is not only betting on the increase in production, but also on increasing coverage and diversification,” said the Director General of Investment and Public Credit, Marlon Herrera, to the deputies.

According to the opinion issued by the Finance Committee, the local loan contribution will be up to $15.4 million for CEL, with this the institution would opt for the procurement of consultancy, design and supervision services in the implementation of the project.

According to the proposal, the project seeks to benefit 16,000 families and indirectly residents linked to the department of San Salvador especially in the districts of Ciudad Delgado and Cuscatancingo, but also those of La Libertad, Cuscatlán, Cabañas and Chalatenango. It is expected to benefit 1.3 million people.

The term of the loan is up to 25 years, of which a grace period of five years is allowed, that is, until the next period of Nayib Bukele’s re-election ends.

It’s not the first debt.

The government of El Salvador also signed a loan contract with Andean Development Cooperation (CAF) with two new loans approved by the Assembly this same month.

One is $68 million to finance the Program for the Strengthening of Public Spaces for the Sustainability of Security and Recovery of Social Tissue in El Salvador – and the second is $75 million for the Environmental Improvement, Drinking Water and Sanitation Program in the High River Lempa Basin (Trifinio) and Puerto de La Libertad, in El Salvador.

This article has been translated from the original which first appeared in El Salvador