Kuwait Fund finances its first projects in El Salvador with KD 3 million for a solar energy project

The Kuwait Fund for Arab Economic Development and the Government of the Republic of El Salvador signed a loan agreement in San Salvador, under which the Fund will provide a loan of 3 million Kuwaiti dinars, equivalent to approximately $9.6 million, to help finance the San Matías Solar Power Plant project in El Salvador.

The agreement was signed on behalf of the Government of El Salvador by Minister of Finance Jerson Rogelio Posada Molina, and on behalf of the Kuwait Fund by Acting Director General Rashid Ali Al-Bader. The signing ceremony was attended by Deputy Minister of Foreign Affairs Adriana Mera, Kuwait’s Ambassador to the United States, Mexico, and concurrently accredited to El Salvador, Saleh Al-Haddad, and El Salvador’s Ambassador to Kuwait, Juan Carlos Stabenow.

The project aims to support economic and social development in El Salvador by increasing electricity generation and harnessing available solar energy resources. This will help meet the growing demand for reliable power, enhance resilience against climate change-related risks, provide clean and sustainable energy for the industrial sector and local communities, create new job opportunities, and increase government participation in the electricity generation sector.

The project involves constructing a photovoltaic solar power plant in Hacienda San Lorenzo, within the San Matías area northwest of the capital, San Salvador. The plant will have an installed capacity of approximately 11 megawatts peak (MWp) and is expected to generate between 20 and 25 gigawatt-hours annually, with connections to the national electricity grid.

The total estimated cost of the project is approximately $13.95 million, equivalent to about 4.3 million Kuwaiti dinars. The Kuwait Fund’s loan of 3 million dinars will cover 69% of the total project costs, while the Government of El Salvador will cover the remaining expenses.

Project implementation is expected to take approximately two years, with completion anticipated in the first half of 2028. The loan has a tenor of 25 years, including a grace period of three years.

The project contributes to achieving several Sustainable Development Goals (SDGs), particularly in the areas of clean energy, economic growth, infrastructure, responsible consumption and production, climate action, and strengthening partnerships for the SDGs.

This agreement marks the first loan arrangement between the Kuwait Fund for Arab Economic Development and the Republic of El Salvador, representing a step forward in the developmental cooperation journey between the State of Kuwait and El Salvador. It aims to broaden cooperation horizons and strengthen the partnership between both sides in areas of mutual interest.