IDB Invest, the private sector institution of the Inter-American Development Bank (IDB), has agreed to fund $1bn for the development of 2.4GW Ituango hydropower plant (HPP) in the northern region of Antioquia in Colombia.

The senior, unsecured A/B loan package has been granted to Colombian multi-utility group Empresas Públicas de Medellín (EPM), which is responsible for the construction of the hydropower facility, which is estimated to cost $5.51bn.

The financing package involves a $300m A loan from the IDB Group, as well a $50m co-loan from the IDB Invest-administered China Co-Financing Fund for Latin America and the Caribbean.

It also comprises a $650m B loan from international commercial banks and institutional investors including CDPQ, KFW IPEX, BNP Paribas, ICBC, Sumitomo Mitsui Banking Corporation, BBVA and Banco Santander.

IDB Invest said: “The financing offers a tenor of 12 years for the A loan, and a 12-year and an 8-year tranche for the B loan.”

Being built on the banks of Cauca River, 8km downstream of the Pescadero road bridge, the Ituango hydroelectric project is being developed in two phase.

The first phase of the project is scheduled to be commissioned in 2018 followed by second stage in 2020. The project is expected to generate around 6,000 direct and 24,000 indirect jobs.

Touted to be the largest of its kind in the country upon completion, the Ituango hydro plant will have annual power output of 13,900GWh, representing around 18% of the country’s total installed power capacity.

The project involves construction of a 79km long reservoir and an active capacity of 980 million cubic meters as well as a 225m high earth-core rock-filled embankment dam with a volume of 20 million cubic meters.