The World Bank Board of Directors has approved a US$480 million guarantee to promote private investment in the renewable energy sector.
The development of renewable energy sources in Argentina is crucial for diversifying the power grid and contributing to climate change mitigation.
Specifically, the World Bank guarantee will support the Fund for the Development of Renewable Energy (FODER, in Spanish), which facilitates financing of projects under the RenovAr Program of the country’s Ministry of Energy and Mining. This initiative seeks to stimulate power generation from wind, solar, biomass, biogas and small-scale hydro sources to achieve the 20 percent renewable energy target by 2025.
Juan José Aranguren, Minister of Energy and Mines of Argentina, said:
“The support of the World Bank is facilitating progress in our country to achieve in a few months what was not done for a decade in renewable energy, contributing to our objective of guaranteeing our energy security and reducing climate change impacts.”
Jesko Hentschel, World Bank director for Argentina, Paraguay and Uruguay, said:
“This project promotes private investment in renewable energy sources to help satisfy the growing energy demand in the country with a clean energy source that strengthens sustainable development.”
The RenovAr Program was implemented in 2016 through two tender rounds (known as Round 1 and Round 1.5) to award 59 projects. These projects will generate 2423 MW and will be implemented throughout the country. Of the total, 27 projects requested the World Bank guarantee, including 12 wind projects (721 MW), 10 solar projects (306 MW), four small-scale hydro projects (4 MW) and one biogas project (1 MW).
This transaction uses a 20-year World Bank guarantee to mobilize private-sector investments.