IDB Approves $135M Credit Line to Boost Sustainable Energy Solutions in Rural Amazon

The Ministry of Natural Resources and local electric company EBS will also benefit from capacity-building efforts aimed at improving their ability to manage rural electrification and water supply projects.

The Inter-American Development Bank (IDB) has approved a $135 million Conditional Credit Line for Investment Projects (CCLIP) aimed at promoting clean and sustainable services as part of a just energy transition. The initiative will be rolled out in two tranches, with the first tranche providing $45 million for infrastructure and bioeconomic empowerment in rural Amazonian communities. An additional $1.5 million in non-reimbursable financing from the Low Emission Energy Fund for People and the Planet will also be allocated.

The program’s first operation will focus on improving access to water, energy, and telecommunications in Indigenous and rural areas, benefiting over 1,200 households, 25 health centers, 30 schools, and 50 small businesses. The project will particularly target indigenous peoples, women, and afro-descendants, creating jobs for 400 women in bioeconomic activities.

Addressing Infrastructure Gaps: Rural areas in the Amazon struggle with limited infrastructure. While national electricity access stands at 98.2%, rural villages lag behind with less than 90% coverage. Around 20,000 households remain off-grid or rely on diesel generators. Similarly, water access is a challenge, with less than 60% of the rural population having reliable supply, and only 27% of residents have internet connectivity.

To address these deficiencies, the program will finance investments in disaster-resilient solar mini-grids to provide permanent electricity, improve water collection and distribution systems, and enhance telecommunications infrastructure. This includes expanding access to telephony, internet, and broadcasting services, which are crucial for both daily living and economic development.

Bioeconomic Empowerment: A key focus of the project is the productive and sustainable use of electricity, water, and telecommunications infrastructure, with an emphasis on fostering the economy. This includes supporting local farmers and small business owners in generating sustainable livelihoods through the use of these services.

The Ministry of Natural Resources and local electric company EBS will also benefit from capacity-building efforts aimed at improving their ability to manage rural electrification and water supply projects.

The first loan under the CCLIP comes with a 23.5-year repayment term, a seven-year grace period, and an interest rate based on SOFR, marking a significant step in improving living standards and promoting sustainable growth in the Amazon.