Uruguay receives a USD 300 million loan to strengthen its power sector
The objective of the loan is to increase power supply reliability—in terms of quality and safety—as well as increase power transfer capacity with neighboring countries and improve the autonomy of Uruguay’s grid.
CAF—development bank of Latin America—has approved a USD 300 million loan in favor of the National Administration of Power Plants and Transmissions (UTE), which will be used to fund investments, allowing to maintain the country’s robust power grid, help reduce power outages, and contributing to decompress the transmission networks and increase the power transfer capacity with neighboring countries.
The funds will be managed by UTE, Uruguay’s public electricity company, and will go to Uruguay’s Electric Sector Strengthening Program – Phase 3. The Program funds a number of investments, including the contribution to the trust in charge of the completion of the 500 kV northern loop, which will add robustness to the international interconnection between Argentina, Uruguay and Brazil, as well as reduce the impact of simultaneous blackouts on 500 kV lines, and help shed the power generated from the north-central part of the country from new renewable energy sources.
“These funds will help not only improve coverage and quality of power supply in Uruguay, but also assist the country in modernizing the entire power grid, to make it one of Latin America’s benchmarks,” said CAF executive president Luis Carranza.
In 2020, CAF approved as much as USD 1.35 billion for Uruguay and currently has a USD 925 million portfolio in the country. The agency’s main lines of work include supporting sustainability-oriented projects, boosting efficiency in infrastructure and logistics projects, financing education reforms, promoting competitiveness and productivity, and supporting SME financing.
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