The Inter-American Development Bank (IDB) has approved a US$30M loan to Panama for a rural electrification programme, which will encourage investment in renewable energy projects such as small hydro power.

The programme will promote public and private investment to provide service for 30,000 rural households, increasing rural electricity coverage by 10%. It includes a system of subsidies for new investments that will motivate private enterprise to invest in rural electrification, through either grid extension or renewable energy projects in isolated areas.

In line with the new IDB initiative ‘Building Opportunity for the Majority’, the programme includes government incentives for the private sector to expand and supply electricity to the poorest communities in rural areas.