In Washington: Gabriela Aguilar (202) 473-6768
In Tegucigalpa: María Amalia San Martín (504) 239-4551
WASHINGTON, January 22, 2009– The World Bank Board of Directors approved today a US$30 million interest-free loan to strengthen the energy sector in Honduras and improve the financial and operational performance of the national electric power company, Empresa Nacional de Energía Eléctrica (ENEE), thus contributing to the sustainability of the country’s energy sector.
The project has three components: building ENEE’s management and commercial capacity; renewing and rehabilitating distribution equipment, including the removal of polluted transformers; and institutional strengthening and corporate governance.
“This operation addresses an energy reorganization strategy launched by the Government, which requires streamlining the state-owned ENEE and further supporting new investments in renewable energy,” said Finance Minister Rebeca Santos.
The energy sector is key to ensuring the first strategic goal of the World Bank’s Country Assistance Strategy for 2007-2010 and to speed up equitable economic development and job creation. It also supports the broader goal of the Poverty Reduction Strategy by contributing to accelerated economic development.
“The World Bank has coordinated this operation with other donors, including the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (CABEI), and the United States Agency for International Development (USAID),” said Laura Frigenti, World Bank Director for Central America. “The Bank has achieved contributions and dialogues regarding technical and financial analysis. We have also worked closely with the International Monetary Fund (IMF) due to the macroeconomic importance of ENEE’s financial soundness,” she added
The IDB is funding another US$48 million component of the aid package intended to improve the transmission network, and the CABEI could provide another US$25 million to build headquarters facilities for the ENEE and make further investments in the rehabilitation of the distribution networks.
The US$30 million credit provided by the International Development Association (IDA) has a 20-year maturity and a 10-year grace period.