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
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
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.
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.