IDB approves $800 million credit line for modernization of Salto Grande project in Argentina and Uruguay
3 July 2023
The Inter-American Development Bank (IDB) has approved a Conditional Credit Line for Investment Projects (CCLIP) of up to $800 million to help modernize the 1890MW Salto Grande Binational Hydroelectric Complex in Argentina and Uruguay.
The initial phase of the credit line involves a First Individual Loan Operation of up to $75 million for each country, amounting to a total of $150 million. This financing will play a vital role in ensuring the reliability and availability of the CHSG, as well as extending its operational lifespan while enhancing its environmental and social sustainability. The project is expected to benefit over 17 million users of the interconnected electricity systems in Argentina and Uruguay. Moreover, the residents of Salto and Concordia, the cities surrounding the project, will experience additional advantages such as coastal protection measures in public spaces.
Salto Grande, which represents the first binational project in the region, has been a catalyst for electrical system integration in the Southern Cone. It has paved the way for future collaborations between Argentina and Uruguay. Both countries are members of the Energy Integration System of the Southern Cone Countries, an initiative aimed at promoting regional power integration with Salto Grande at its core.
The approved loan will be instrumental in upgrading the infrastructure of the project and strengthening its institutional framework. Digitalization, inclusion, and regional development are key focus areas for this financial support. In terms of institutional strengthening, the loan aims to enhance digital corporate management by implementing cybersecurity measures. Technical studies will also be conducted to support the smooth execution of the operation. Additionally, the loan will facilitate the next phase of modernization and provide training for Salto Grande staff on technical matters, management, gender policies, inclusion of persons with disabilities, and prevention of sexual and workplace violence and harassment. The loan also seeks to promote local productive development and job creation by strengthening the capacities of regional suppliers.
The IDB has been actively supporting the modernization of Salto Grande since 2019 through the ongoing execution of the Modernization of the Salto Grande Binational Hydroelectric Complex operation, which has received a total of $80 million ($40 million per country).
The Conditional Credit Line for investment loans in the energy sector will be available for 15 years, with a maximum amount of $800 million, disbursed through at least three individual lending operations. The initial loan approved under this credit facility amounts to $150 million, with a repayment period of 23.5 years, a disbursement period of six years, a grace period of 7 years, and an interest rate based on SOFR.
Image courtesy of Lenilucho
