CABEI, CNE and GIZ STRENGTHEN CAPACITIES OF SALVADORAN BANKING SYSTEM TO FINANCE RENEWABLE ENERGY PROJECTS

The Central American Bank for Economic Integration (CABEI), through its Project Accelerating Renewable Energy Investments in Central America and Panama (ARECA), the Salvadoran National Energy Council (CNE1) and the German Agency for International Cooperation (GIZ), conducted a, “Workshop on guidelines for financial risk analysis of renewable energy projects."

The workshop was aimed at national banking officials and institutions in the energy sector to promote investment in renewable energy projects and remove the financial barriers that prevent their development.

According the Master Plan prepared by the CNE, at present El Salvador has an installed renewable capacity of 790.3 MW to generate clean energy, and there is a projection for 2017 of an increase in the installed capacity of 150 MW from possible projects that can be developed with different renewable technologies, thus reducing the dependence on fossil fuel thermoelectric plants.

The workshop was attended by managers and representatives of the boards of directors of commercial banks, risk analysts and portfolio executives. They learned about risk variables and indicators, as well as the legal incentives, regulatory frameworks and permits that such technology requires. In addition, a training session was carried out to conduct evaluations of renewable energy projects in accordance with the technical requirements that each bank requires in order to help investors to realize their projects successfully.

Studies

The bibliographic tools that were used in the workshop are studies like the ones available on the ARECA Project website ( www.proyectoareca.org) and the CNE Master Plan, which makes it possible to identify the existing energy potential in the country and analyze the different technologies available.

There was also a review of new regulatory frameworks, incentives and existing tariff systems for renewable energy in each country. This will enable the development of energy projects in remote areas with difficult access through by providing benefits and incentives which will be examined from a banking perspective.

Participants

The participants came from institutions, such as the Banco de Fomento Agropecuario, Banco Hipotecario, Banco Agrícola, Banco de América Central and Banco de Desarrollo de El Salvador BANDESAL. There were lectures on topics such as the electricity market situation and regulatory framework, marketing of energy (contract types), authorizations and permits, categorization of projects and environmental impact studies, among other issues of strategic importance for the banking industry and for project developers.