Washington DC, December 20, 2001
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is investing US$120 million to support the expansion of the electricity distribution networks in El Salvador, which will bring much needed benefits to the rural areas of the country. Currently, 60 percent of the rural population in El Salvador lacks access to electricity.
This investment, which includes $45 million for IFC’s own account and $75 million for the account of participant banks, will finance the five-year expansion programs of three private electricity distribution companies in El Salvador: Compañía de Alumbrado Eléctrico de San Salvador, S.A.de CV (CAESS), Empresa Eléctrica de Oriente, S.A. de CV (EEO) and Distribuidora Eléctrica de Usulatan, S.A. de CV (DEUSEM).
CAESS, EEO and DEUSEM, which are majority owned by the AES Corporation, a United States company involved in development and operation of power generation and distribution projects worldwide, will use IFC’s financing to replace antiquated distribution infrastructure, to improve service quality and to expand their networks into underserved rural areas, a number of which are recovering from the recent devastating earthquakes which hit El Salvador. The three electricity distribution companies involved in the project are headquartered in the cities of San Salvador (CAESS), San Miguel (EEO) and Usulatan (DEUSEM).
IFC’s participation in the financing will support the electricity sector reform program being undertaken by the Government of El Salvador, which privatized its power distribution network in February 1998.
Francisco Tourreilles, Director of IFC’s Power Department, said, “This investment will help ensure that these privatized distribution companies are able to make the capital investments that are needed to improve the reliability of the distribution system in El Salvador and to expand the network, so that a larger share of the population can access the benefits of the electricity sector reform implemented by the Government.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
