WASHINGTON, GUATEMALA – The Inter-American Development Bank (IDB) approved a $250 million loan to finance a program to increase electricity coverage in rural areas of Guatemala.
The Rural Electrification Access Program, approved by the IDB board of executive directors as a Loan for Multiple Works Programs, aims to increase the number of users with access to electricity in rural areas, as well as strengthen institutional capacity for the planning, design, and management of rural electrification projects.
The IDB supports the country in reducing the gap in access to electricity, especially in rural areas. These efforts are now complemented by this new rural electrification program, which will benefit approximately 70,000 households with new access to electricity in municipalities with the lowest electrical coverage. Indigenous populations and women will also benefit from awareness actions on productive uses of electricity and training for the maintenance of isolated systems.
Between 1996 and 2023, Guatemala increased the national electrification rate from 52 to 90 percent. Despite this progress, it is still below the regional average of nearly 98 percent. About 380,000 households lack electricity and rely on candles, kerosene lamps, diesel generators, or batteries to meet their energy needs. The largest electrification gaps are found in rural areas, where the electricity service coverage is 82 percent.
The program will finance investments in rural electrical infrastructure, including the expansion of medium- and low-voltage distribution networks and the strengthening of existing networks. It will also finance mini-grids with renewable energy and energy storage systems, and the installation of Individual Solar Photovoltaic Systems with energy storage.
Additionally, the program will support the strengthening of the National Electrification Institute (INDE) through actions such as the development of geo-referenced planning systems and cost-efficient modeling, and awareness, technical training, and community empowerment programs.
The IDB loan has a repayment term of 25 years, a 5.5-year grace period, and an interest rate based on SOFR.
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