This funding will be used in hydropower, wind, geothermal and photovoltaic renewable energy schemes across the region.

In addition, the joint program with the Central American Bank for Economic Integration will enable approximately $500m of investment in projects across six central American countries of Honduras, Nicaragua, El Salvador, Guatemala, Costa Rica and Panama.

Commenting on the funding, European Investment Bank Latin America vice president Magdalena Álvarez Arza, responsible for lending in the region, said considerable investment is needed to harness the potential of renewable energy and more efficient energy use to reduce carbon emissions and provide energy essential for economic growth.

Central American Bank Economic Integration executive president Nick Rischbieth said, "As the principal source of multilateral funding in the region, and as the financial arm of the central american integration, we are most pleased with the expansion of our cooperation with EIB in the framework of our shared goal of promoting renewable energy and energy efficiency investments as drivers of sustainable and balanced growth in our beneficiary member countries."

EIB noted that the large-scale initiative will help reduce fossil fuel imports dependence in the region and lower carbon emissions from energy production. The new lending scheme will enable support for public and private sector investment in both renewable energy and energy efficiency projects.