IDB Invest granted a loan package of around $368m to AES Dominicana Renewable Energy (ADRE), a subsidiary of The AES Corporation in the Dominican Republic. This funding is intended to support the planning, building, and operation of three new non-conventional renewable energy (NCRE) projects, collectively amounting to 240MWac of installed capacity. Additionally, part of the funds will be allocated to refinancing the short-term debt associated with three existing renewable energy projects, totalling 150MWac of installed capacity.

The funding arrangement comprises $37m from IDB Invest and $331m sourced from 21 financial institutions. IDB Invest, in collaboration with Banco Latinoamericano de Comercio Exterior (Bladex), JP Morgan Chase Bank (JP Morgan), and The Bank of Nova Scotia (Scotiabank), took the lead in the underwriting process as joint lead arrangers and bookrunners. With demand surpassing expectations, the transaction was oversubscribed at 2.0 times, garnering orders exceeding $485m. Notably, this marks the largest financing initiative for renewable energy projects in the context of a Caribbean economy.

By expanding the non-conventional renewable energy (NCRE) generation capacity from 150MWac to 390MWac, the forthcoming renewable energy projects aim to diversify the energy landscape in the Dominican Republic. In a nation where 71% of the energy generated in 2022 was derived from fossil fuels, this initiative holds the potential to bring about significant change. Moreover, the agreement aligns with AES’s decarbonisation strategy, aiming to achieve net-zero carbon emissions from electricity sales by the year 2040.

Anticipated outcomes of the new renewable energy projects include an annual generation of approximately 824GWh, contributing to a substantial reduction in the country’s carbon footprint. It is estimated that these projects will displace greenhouse gas emissions equating to around 441,000 metric tonnes of carbon dioxide per year, a figure comparable to removing approximately 96,000 vehicles from the roads annually. Additionally, the implementation of these NCRE projects is expected to create about 1,300 jobs during the construction phase and sustain 80 permanent jobs during operation.

The project aligns with the Dominican Republic’s nationally determined contribution (NDC), which targets a 27% reduction in greenhouse gas (GHG) emissions by the year 2030.