Kuwait Fund for Arab Economic Development Signs $3 Million Loan Agreement with El Salvador to Finance Solar Power Plant

The Kuwait Fund for Arab Economic Development signed a loan agreement with the Government of the Republic of El Salvador worth 3 million Kuwaiti dinars (approximately 9.7 million US dollars) to help finance the San Matias Solar Power Plant project in El Salvador.

In a statement to the Kuwait News Agency (KUNA) on Tuesday, the Fund said the project aims to support economic and social development in the Republic of El Salvador by increasing electricity generation and harnessing available solar energy resources.

It added that the project contributes to meeting the growing demand for reliable energy, enhances resilience against climate change-related risks, provides clean and sustainable energy for the industrial sector and local communities, creates new job opportunities, and increases government participation in the electricity generation sector.

The Fund clarified that the project involves constructing a photovoltaic solar power plant in Hacienda San Lorenzo, within the San Matias area northwest of the capital, San Salvador, with a combined capacity of approximately 11 megawatts. It is expected to generate between 20 and 25 gigawatt-hours annually and will be connected to the national electricity grid.

The total cost of the project is estimated at approximately 13.9 million US dollars, with the Fund’s loan covering about 69 percent of the total costs, while the Government of the Republic of El Salvador will cover the remaining expenses.

The project is expected to take about two years to implement, with completion anticipated in the first half of 2028. The loan has a term of 25 years, including a grace period of three years.

The Fund noted that 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 to achieve the SDGs.

This agreement marks the first loan agreement signed between the Kuwait Fund for Arab Economic Development and El Salvador, representing a step forward in the developmental cooperation between the two countries, helping to broaden cooperation horizons and strengthen partnerships in areas of mutual interest.

The agreement was signed by Acting Managing Director of the Fund, Rashid Al-Bader, and El Salvador’s Minister of Finance, Jerson Molina.

Attending the signing ceremony were Kuwait’s Ambassador to the United States, accredited also to El Salvador, Saleh Al-Haddad; El Salvador’s Deputy Minister of Foreign Affairs, Adriana Mera; and Juan Boyat, Ambassador of El Salvador to Kuwait.