Nearshore Americas

IDB Lends Ecuador $150 Million to Bolster its Electric Grid

Ecuador is gearing up to build and expand six new electrical transmission systems, adding 586 kilometers of transmission lines and enlarging 12 substations with a US$150 million loan from the Inter-American Development Bank (IDB).

Designed to allow for greater generation of hydroelectric power, the program will strengthen Ecuador’s interconnection with Colombia, overhauling electrical transmission systems in and around Yanacocha and Durán, which is home to several grids.

Growth in demand for electricity in Ecuador has exceeded growth of supply. In 2012, demand for energy was 6.1% higher than in 2011.

In order to meet these challenges, the government of Ecuador has various hydroelectric construction projects under way. The new projects, according to reports, will add 2,362 MW of power to the grids.

The government, which has set aside US$19 million for the program, has vowed that it would reinvest the money earned by electricity supply firms for further bolstering the transmission systems.

Reports say that eight hydroelectric plants currently under construction will make Ecuador a net exporter of electricity by 2018.

Power shortage has long been a hurdle for Ecuador to boost its economy, with more than 50% of its electricity coming from hydroelectric generators. The Paute River Dam alone supplies up to 20,000 megawatts, or 40% of Ecuador’s power.

A devastating drought in 2009 caused a power crisis across the country, forcing people to experience rolling blackouts for two to six hours a day.

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Local media reports say the authorities also planning to develop environmental specifications of the Extra High Voltage System between Ecuador and Peru.

The IDB, according to reports, is pushing Latin American countries to reduce their dependency on thermal power as that leads to coal mining and environmental destruction.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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