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IFC Finances the First Wind Power Plant in the Dominican Republic


IFC in Washington:
Adriana Gomez

Phone: +1 (202) 458 5204

Email:
agomez@ifc.org

IFC in the Dominican Republic:

Salem Rohana

Email:
srohana@ifc.org

CEPM in the Dominican Republic:

Esteban Gómez

Phone: + 1(809) 549-7659


Washington, D.C., July 7, 2005.- The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide up to $10 million and a guarantee of up to $13 million to Consorcio Energetico Punta Cana-Macao S.A. (CEPM), a privately-owned utility in the Dominican Republic.  IFC’s financing will support construction of an 8.25-megawatt wind power plant and CEPM’s capital expenditures.

This wind power project will be the first of its kind in the Dominican Republic.  It will provide a cleaner source of electricity and save on fuel costs by displacing part of the utility’s existing diesel generation.  CEPM is a vertically-integrated and off-grid private electric utility, serving resort areas and surrounding communities in Punta Cana, on the country’s east coast.  The utility also owns Compañia Electricidad de Bayahibe, S.A., which serves resort hotels in Bayahibe on the south coast.  


The new facility will support the tourism sector in the Dominican Republic, one of the country’s key foreign currency earners with close to $3 billion in revenue annually. The sector contributes 7 percent of the country’s GDP and generates some 554,000 jobs directly and indirectly.  


The country’s tourism depends on a reliable and quality electricity supply, but in recent years the national power grid has faced disruptions. CEPM is helping address this need; its utilities serve areas that receive about half of the country’s tourism arrivals.    


“IFC’s financing to CEPM fits our strategy to support infrastructure and tourism development in the Dominican Republic, both of which are critical to job creation and economic growth,” said Atul Mehta, IFC’s Director for Latin America and Caribbean.


External support still remains central to the development of wind power around the world.  This is the first time that IFC has collaborated with DANIDA, the Danish government’s development agency, through a program that provides a subsidy to economically sound wind power projects in developing countries.  Under this subsidy program, ABN AMRO Bank, Copenhagen branch, will provide the loan to CEPM against the IFC guarantee for the wind power project.  


“IFC is committed to facilitating private sector investment in renewable energy sources, including wind power generation systems,” said Francisco Tourreilles, IFC’s Director for Infrastructure.  


IFC is pursuing other wind project financing opportunities across Latin America and the Caribbean and other developing regions, an effort that includes addressing market barriers. In generating no pollution and using a free and renewable energy resource, wind power offers substantial environmental benefits.


IFC in the Dominican Republic

In fiscal year 2005 (July 2004-June 2005), IFC provided $155 million in financing (including $55 million in syndications) to the private sector in the Dominican Republic.  The projects covered priority areas, including energy, airports, and tourism.  As of June 2005, IFC's investment portfolio in the country stood at $402 million (including $133 million in syndications).  IFC aims to support projects that generate growth and improve the country's competitiveness, and its investments in the Dominican Republic are diversified across a wide range of sectors, including health care, telecommunications, infrastructure, tourism, general manufacturing, and the financial sector.


About IFC

The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.  In its fiscal year that ended June 2004, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries.  IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.