2024-05-01 05:34:30
The credit was signed in Quito within the framework of the visit to Ecuador of the Commissioner for the Environment, Oceans and Fisheries of the European Union (EU), Virginijus Sinkevičius
He Government of Ecuador signed, this Friday, March 22, 2024, with the European Investment Bank (EIB) the credit of 125 million dollars that will practically finance the half of the high voltage electrical interconnection with Peru.
The credit was signed in Quito within the framework of the visit to Ecuador of the Commissioner for the Environment, Oceans and Fisheries of the European Union (EU), Virginijus Sinkevičiuswho last week went on a tour of South America that also took him to Paraguay and Bolivia.
The funds will be complemented by another loan of another 125 million dollars from the Inter-American Development Bank (IDB) to support the cost of the work in Ecuadorian territory, whose total investment will amount to about 289 million dollars.
With these two credits they will be built 280 of the 550 kilometers of the 500,000 volt line that will take place from Guayaquil, Ecuador) until Piura (Peru)which constitutes a key element of the Andean Electrical Interconnection System.
The execution of the project in Ecuador will be in charge of the Strategic Public Company Electricity Corporation of Ecuador (Celec)the Ecuadorian state energy company responsible for the generation, transmission and distribution of electricity in Ecuador.
In addition to Commissioner Sinkevičius, the loan signing ceremony was also attended by Ministers of Foreign Affairs, Gabriela Sommerfeld; and from Energy and Mines, Andrea Arrobo.
The head of the Latin America Divisiondel AT, Just Kristinand the general manager of the Strategic Public Company Corporación Eléctrica del Ecuador (Celec), Paul Urgilésas well as the IDB representative in Ecuador, Juan Carlos De la Hozand the ambassador of Peru in Ecuador, Eduardo Zeballos.
«A historical milestone»
Arrobo indicated that the subscription of this loan constitutes “a historical milestone” within the framework of the integration that is sought to be promoted in Latin AmericaWell, with this Ecuador project will be connected with its two neighbors and no longer only with Colombia.
«It is something that the country has been looking for for 20 years and that has been very difficult to achieve, first for a political issue, since the two countries could not reach an agreement, and also for a harmonization issue because the two countries had to regulate what the exchange of energy is,” Arrobo noted.
“But then the most difficult thing after that was to obtain the financing,” added the minister of Energy and Minesfor whom this project will not only create employment, but will also allow “diversifying the income of the local generationnot generate a dependency and export when there are surpluses to two markets that have a different demand«.
The need for interconnection between Ecuador and Peru was evident at the end of 2023, when Ecuador entered a period of blackouts to ration electricity because a historic drought prevented its hydroelectric plants cover domestic demand, so it was forced to import energy to Colombia and to reactivate thermoelectric plants.
Arrobo commented that, having had the electrical interconnection with Peru during that energy crisisits effects could have been greatly mitigated, since Ecuador would have had more access to electricity and Colombia and Peru would have competed for export energya, and, therefore, the import price would have been more advantageous.
A step towards decarbonization
The president of the EIB, Nadia Calvinohighlighted in a statement that the EU’s financial arm is “proud to support such an important project that will improve the security of electricity supply and celectricity trade between Ecuador and Peru«.
Calviño predicted that this work, once it comes into operation, will contribute to decarbonization and the fight against climate crisis.
«Together with its partners, the EIB promotes the sustainable economic development of Ecuador within the framework of the investment agenda Global Gateway of the European Union in Latin America and the Caribbean«, noted the former vice president of the Government of Spain and former Minister of Economy.
For his part, Sinkevičius listed the benefits it will bring to Ecuador and Peru electrical interconnection in economic, social and environmental terms. «It means better energy security, because dependence on a single energy source is reduced. electrical generation system«, he pointed out.
“Connecting the systems will make it easier to balance the generation with demand, improving stability and resilience. And of course, it represents a great tax on trade and investments. It means opportunity to develop joint renewable energy projectswhich stimulates the economic growth y reduce costs to consumers«he added.
For his part, Urgilés indicated that “the project that the two countries exchange electric power, efficiently and safely, given its hydrological complementarity“, which “will guarantee an Ecuador with safe and reliable energy and without further ado blackouts«.