Argentina, Uruguay to Receive Credit Line to Modernize Hydroelectric Complex

IDB approved credit line up to $800 million to support modernization of the Salto Grande Binational Hydroelectric complex.

The Inter-American Development Bank (IDB) has approved a Conditional Credit Line for Investment Projects (CCLIP) of up to $800 million to support the implementation of the Strategic Investment Plan for the modernization of the Salto Grande Binational Hydroelectric Complex (CHSG, for its Spanish acronym) in Argentina and Uruguay. The objective is to contribute to the decarbonization of the interconnected electricity system and foster regional sustainable development, which are crucial for both countries efforts to advance their climate commitments.

The First Individual Loan Operation under this CCLIP is for up to $75 million for each country (up to $150 million total). This operation will contribute to ensuring the reliability and availability of the CHSG, extending its useful life and its environmental and social sustainability. The project will benefit more than 17 million users of the interconnected electricity systems of Argentina and Uruguay. Additionally, residents of Salto and Concordia, the cities surrounding the CHSG, will benefit from coastal protection works in the public spaces to be intervened.

The CHSG was the first binational project in the region, initiating the process of electrical systems integration in the Southern Cone, which in turn paved the way for further binational projects down the road. Argentina and Uruguay are members of the Energy Integration System of the Southern Cone Countries, whose goal is to promote regional power integration using CHSG as a cornerstone.

The loan will help upgrade CHSG's infrastructure and finance its institutional strengthening, with a focus on digitalization, inclusion and regional development. In terms of institutional strengthening, it will improve digital corporate management by incorporating cybersecurity measures and conducting technical studies to support the execution of the operation. It will also prepare a next stage of modernization and training for CHSG staff on technical issues, management, promotion of gender policies, inclusion of persons with disabilities, and prevention of sexual and workplace violence and harassment. In addition, the loan will promote local productive development and job creation through the strengthening of regional suppliers’ capacities.

The IDB has been supporting CHSG’s modernization since 2019, through the Modernization of the Salto Grande Binational Hydroelectric Complex operation (RG-L1124) currently under execution, for a total of $80 million (US$40 million per country).

The Conditional Credit Line for investment loans in the energy sector will be available for 15 years (for an amount of up to $800 million), through at least three individual lending operations. The first loan approved under this credit facility will be for up to $150 million, with a repayment term of 23.5 years, a disbursement period of 6 years, a grace period of 7 years and an interest rate based on SOFR.