MCDF Grant Supports El Salvador Clean Energy Transmission Grid Expansion

A USD1.05 million grant to support the development of a transmission grid expansion project in El Salvador that will spark greater clean energy trade in Central America was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee during its meeting in Beijing on 31 March. The project will be implemented by the Asian Infrastructure Investment Bank (AIIB).

The MCDF grant will fund preparatory activities for the construction of the new 35-kilometer (km), 230-kilovolt (kV) Guajoyo 2-Santa Ana 2 transmission line that will enable the export of affordable wind power produced in northwest El Salvador to neighboring countries while enhancing network flexibility and continuity during maintenance.

The MCDF grant will also support the development of the 27-km, 115-kV Tecoluca-El Pedregal transmission line that will allow increased solar and geothermal generation in San Vicente department, in central El Salvador, and further contribute to the country’s renewable energy export growth. It will also prevent supply disruptions to its international airport and other end-users during maintenance.

Technical work at the Nejapa substation in central El Salvador to realize stable power exchanges across Central America’s grid network will additionally be supported by the MCDF grant.

The grant will fund an assessment of the transmission grid expansion project’s overall technical design readiness, procurement preparation, environmental and social impact and climate assessments, and an AIIB-executed technical audit to verify that these studies are technically sound and aligned with International Financial Institution (IFI) standards.

The grant will also fund project preparation guidance and advisory services for Empresa Transmisora de El Salvador, the state-owned entity that operates the country’s electricity transmission network.

This preparatory support will collectively help ensure that the transmission grid expansion project satisfies the standards required for financing by AIIB and partners and its climate transition and broader sustainable development benefits for El Salvador and the region can be fully achieved.