The Inter-American Development Bank (BID) announced on 1 November 2018 lending US$400 million to the Dominican Republic to encourage financial sustainability and the operational efficiency of the electricity sector.
The funds include improving the capacity for supervision of the financial and operational indicators of the electrical sector and improving transparency. In addition, the efficient expansion of the systems of generation and transmission of electricity and improving the efficiency of the management of the demand for electricity as well as support for the design and implementation of a new efficient and flexible tariff.
IDB says that the goals of the plan include strengthening the electricity sector’s institutional and supervisory capital and enhancing sectorial planning and regulation. At the same time, the loan will help support better management and operations at electricity distribution companies. The idea of strengthening the electricity sector’s institutional and supervisory capital includes improving the supervisory capacity of its operational and financial leaders by providing more transparent information. It also includes boosting oversight of the wholesale electricity market to increase efficiency in power generation.
The funds will be used to enhance sectorial planning and consolidation of the regulatory framework aiming to ensure efficient expansion of electricity generation and transmission systems; boost efficiency in the management of demand for electricity. It was agreed that the Ministry of Energy and Mines would enhance its institutional capacity for the development of energy efficiency programs; and support the design and implementation of a new and efficient utility rate regime that will favor sustainability in the sector.
The US$400 million IDB loan is over 20 years with a one year disbursement period, a grace period of 5.4 years and an interest rate pegged to the LIBOR.
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IADB
6 November 2018
