IPPToday #137: Development financiers unite to support wind farm in Dominican Republic
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IFC, a member of the World Bank Group, with support from the Government of Canada, has completed an US$80 million financing package for the construction and operation of a new, grid-connected, 50 MW wind farm in the Dominican Republic. The project is intended to help diversify the country's energy matrix and ease its dependence on imported fossil fuels.
Parques Eólicos del Caribe (Pecasa) will be one of the Dominican Republic’s largest wind farms and is expected to reduce greenhouse gases by about 91,000 tons CO2 equivalent per year, which is roughly comparable to taking 20,000 cars off the road. Pecasa is owned by Paris-based Akuo Energy SAS.
Located on the country’s northern coast, about 260km from Santo Domingo, Pecasa has a total project cost of US$125 million and is expected to become operational in the first half of 2019.
IFC arranged a financing package which includes US$8.5 million from IFC’s own account, US$18 million from the Dutch Development Bank (FMO), US$17 million from the IFC-Canada Climate Change Program, US$15 million from Proparco, the French development finance institution, and US$11.5 million from the German Investment Corporation (DEG).
IFC have stressed that the government of Canada's contribution was instrumental to the viability of the financing package viable.
Pecasa will sell all its energy output to the government-owned power company, Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE), through a dollar-denominated power purchase agreement for a 20-year term.
Akuo Energy have undertaken projects in the Carribbean for many years. However this wind farm is particularly significant as its development spearheads the company's growth strategy, which has been implemented following the establishment of a regional office in 2016.
The project aligns with the Dominican Republic's policy to diversify its energy mix, implement more sustainable economic development, and utilise very abundant resources in terms of renewable energy, formalised in the National Pact for the Reform of the Power Sector. This is especially important as the country is particularly sensitive to climate change.
The government of Canada are supporting the project as part of their Powering Past Coal Alliance with the UK, which was launched at COP23. A foundation of the alliance is the advocacy of using clean, renewable energy to tackle climate change and reduce reliance on fossil fuels.