Costa Rica to Provide Better Electricity with Support from the IDB

WASHINGTON - The Inter-American Development Bank (IDB) has approved a $200 million loan to supply more reliable, efficient, and sustainable electricity in Costa Rica.

The operation, a specific investment loan, has been approved by the IDB's Board of Executive Directors. It is the second phase of a conditional credit line for investment projects to expand electrical power from renewable sources in Costa Rica and improve the country's power transmission and distribution systems.

The new program will directly benefit the National Electric System's nearly two million consumers, which include households (around 5.2 million people, or 99.4% of the population), industries, and businesses.

The program will also increase the efficiency of the public lighting system, improving safety and community life for around 350,000 people in rural and peri-urban areas.

Strengthening Costa Rica's electricity grid will also boost the reliability of the regional electricity market, which integrates Costa Rica with five other Central American countries. The program will also directly benefit the Costa Rican Electricity Institute by building its institutional and technical capacities.

The program will finance upgrades to the Ventanas-Garita Hydroelectric Plant to ensure that it can reliably produce power for an additional 30 years. As part of the plan, Costa Rica will also modernize and expand its electricity transmission infrastructure and enhance the efficiency of the public lighting system managed by the Electricity Institute by replacing approximately 40,000 conventional lights with LED technology.

The $200 million loan has a 23.5-year repayment term, a 7-year grace period, and an interest rate based on the Secure Overnight Financing Rate (SOFR). The local partner will contribute an additional $115 million.