Washington DC, December 20, 2001—The
International Finance Corporation (IFC), the private sector arm of the
World Bank Group, is investing US$120 million to support the expansion
of the electricity distribution networks in El Salvador, which will bring
much needed benefits to the rural areas of the country. Currently,
60 percent of the rural population in El Salvador lacks access to electricity.
This investment, which includes $45 million for IFC’s own account and
$75 million for the account of participant banks, will finance the five-year
expansion programs of three private electricity distribution companies
in El Salvador: Compañía de Alumbrado Eléctrico de San Salvador, S.A.de
CV (CAESS), Empresa Eléctrica de Oriente, S.A. de CV (EEO) and Distribuidora
Eléctrica de Usulatan, S.A. de CV (DEUSEM).
CAESS, EEO and DEUSEM, which are majority owned by the AES Corporation,
a United States company involved in development and operation of power
generation and distribution projects worldwide, will use IFC’s financing
to replace antiquated distribution infrastructure, to improve service quality
and to expand their networks into underserved rural areas, a number of
which are recovering from the recent devastating earthquakes which hit
El Salvador. The three electricity distribution companies involved
in the project are headquartered in the cities of San Salvador (CAESS),
San Miguel (EEO) and Usulatan (DEUSEM).
IFC’s participation in the financing will support the electricity sector
reform program being undertaken by the Government of El Salvador, which
privatized its power distribution network in February 1998.
Francisco Tourreilles, Director of IFC’s Power Department, said, “This
investment will help ensure that these privatized distribution companies
are able to make the capital investments that are needed to improve the
reliability of the distribution system in El Salvador and to expand the
network, so that a larger share of the population can access the benefits
of the electricity sector reform implemented by the Government.”
IFC’s mission 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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956 through the close of the last fiscal year on June 30, 2001, IFC
committed more than $31 billion of its own funds and arranged $20 billion
in syndications for 2,636 companies in 140 developing countries. IFC’s
committed portfolio at the end of FY01 was $14.3 billion.