Generation infrastructure at the Cañaveral-Río Lindo hydroelectric project in Honduras is to be upgraded with the aid of a $23 million loan from the Inter-American Development Bank (IDB).
The upgrade project, being executed by the National Electrical Energy Company Empresa Nacional de Energía Eléctrica (ENEE), is expected to prolong the operating life of the facility by at least 30 years and increase its installed generating capacity by 20.8MW.
Located in the Cortés region, the Cañaveral - Río Lindo project was the first hydroelectric schemes in the country. With construction having started in 1960, the two 14.5MW units at the Cañaveral plant came online in 1964. In 1971, the first two 20 MW units came on line at the Río Lindo plant, while in 1978 units three and four, also generating 20MW, became operational for a total installed capacity of 109MW. The facility accounts for 35% of the hydroelectric power generated by the state, and 9.6 percent of the overall national electricity supply.
The IDB and the Japan International Cooperation Agency (JICA) will finance the new upgrade project under the framework agreement for Co-financing Renewable Energy and Energy Efficiency Projects (CORE), which was established between the IDB and JICA in 2012 and modified in 2014. The cost of the project is estimated at $167.2 million. JICA will provide $135.4 million for overhauling and upgrading the generating units. The IDB will contribute $23 million to restore electrical substations and strengthen ENEE's power generation company. The local contribution will be $8.8 million.
The IDB's $13.8 million loan comes from the bank's ordinary capital and is over 30 years, with a grace period of six years and an interest rate pegged to the LIBOR. The project also features financing from the Fund for Special Operations to the tune of $9.2 million, with a reimbursement and grace period of 40 years and an interest rate of 0.25%.
