Press Releases

IFC to Invest in Renewable Energy Project in Guatemala

Adriana Gomez
Phone:  (202) 458-5204

Fax:  (202) 974-4384


Expected to be first IFC-financed project to sell carbon credits

Washington D.C., December 20, 2002
—The International Finance Corporation, the private sector arm of the World Bank Group, signed an agreement to finance the construction of the El Canadá 43 MW hydroelectric power plant in western Guatemala. IFC is also assisting the sponsor with the sale of carbon credits generated by the project with another World Bank affiliate. The sponsor of the project is Energía Global International, a wholly owned subsidiary of Enel, S.p.A. of Italy.

El Canadá is a run-of-the-river, hydroelectric plant, which will be built about 200 km west of Guatemala City and will be constructed downstream of an existing hydroelectric plant on the Samalá River. The plant will use some existing infrastructure, which will reduce its environmental impact. The project is based on an innovative contractual structure, that relies upon Guatemala’s competitive market framework.

IFC is investing US$15 million for its own account in the project. The Netherlands Development Bank (FMO) is providing $12 million in the form of a B-Loan, and Banco de Occidente of Guatemala is providing $10 million in debt.

Francisco A. Tourreilles, Director of IFC’s Power Department, said, “The El Canadá project demonstrates that renewable energy projects in competitive markets are possible, provided capital costs are economical, the regulatory environment is stable, and long-term financing from a lender such as IFC is available. IFC is particularly pleased to be working with Energía Global International and Enel in this important project in Guatemala, a country which has played a pioneering role in private power over the last decade and where IFC looks forward to finance other projects in the sector.” Mr. Tourreilles added, “The prospect for the sale of carbon credits generated by the project highlights the potential of this new significant revenue source to enhance the profitability of renewable and environmentally friendly power projects.”

Edward M. Stern, CEO of Energía Global International said, “We value our relationship with the IFC in this important project and believe that it represents a true international partnership in support of economically and environmentally beneficial development.”

The El Canadá project will be one of the few new hydroelectric projects built in Guatemala over the past 12 years, and will displace approximately 140,000 tonnes of equivalent/year greenhouse gas emissions. The World Bank Group manages two in-house carbon credit finance groups that work closely with IFC’s Power Department to offer clients both project finance and carbon credits sales.  The combination of the two provides sponsors with a significant financial advantage by lowering costs and providing greater efficiency.

IFC is actively promoting the new and evolving market for greenhouse gas emission reductions. For developing countries, the purchases of carbon credits by the World Bank-managed carbon credit finance groups will encourage the transfer of cleaner technologies to reduce emissions at an effectively reduced cost, and for developed countries the purchases increase the range of options for complying with the Kyoto Protocol emission reduction requirements.

The Kyoto Protocol of the U.N. Framework Convention on Climate Change calls for industrialized countries to reduce their GHG emissions to levels below those generated in 1990 by the period 2008 – 2012. Emission reductions result from activities that avoid or reduce the production of carbon dioxide, methane or other greenhouse gases as compared to a ‘business as usual’ situation, or from ‘sequestering’ carbon emissions in biomass such as forests and soils. The market for GHG emission reductions is becoming established and is expected to grow significantly over the next few years.

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 FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.

Generadora de Occidente Ltda.