El Salvador
Press Release

IDB Invest, Neoen Improve the Stability & Security of El Salvador’s Power Grid

Bnamericas Published: Monday, July 26, 2021
IDB Invest, Neoen Improve the Stability & Security of El Salvador’s Power Grid

IDB Invest release

IDB Invest, a member of the IDB Group, has granted two long-term loans to the Capella Solar and Providencia Solar projects operated by Neoen, one of the most dynamic renewable energy producers in the world. The resources will be used to finance two new energy storage batteries for the aforementioned projects and to refinance the existing battery installed in Capella.

The deals will improve the stability and safety of the Salvadoran electricity grid, adding 11 MW / 8 MWh in two energy storage batteries providing regulated primary and secondary reserve services at the Capella Solar (140 MWp) and Providencia Solar (101 MWp) projects, located in the departments of Usulután and La Paz, respectively. With these new additions, Neoen's batteries in El Salvador will reach a total power of 14 MW and a storage capacity of 10 MWh, making it the largest group of energy storage batteries in Central America.

Financing for these teams will be granted by IDB Invest with blended financing resources from the Canadian Climate Fund for the Private Sector of the Americas - Phase II (C2F2). This transaction presents a flexible repayment scheme linked to the savings in operating costs of both solar plants, generated by the use of energy storage batteries as technology for the provision of regulated primary and secondary back-up services. Through this project, IDB Invest and C2F2 will be providing their largest financing to date for energy storage batteries in Latin America and the Caribbean.

The energy storage projects are already in the works and should be up and running by the second half of 2022. Thanks to their response capabilities in milliseconds, the batteries will improve the quality of the primary and secondary back-up service that provides stability and security for the electrical network. It is estimated that the batteries will reduce CO2 emissions by 5,000 metric tons per year, as they displace the service of plants that operate on fossil fuels to cover the primary and secondary back-up requirements of the Salvadoran electricity grid.

This operation potentially contributes to two United Nations Sustainable Development Goals (SDGs): Affordable and Clean Energy (SDG 7), Industry, Innovation and Infrastructure (SDG 9).

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