Dominican Republic Promotes Wind Energy with Support from IDB

The Inter-American Development Bank approved two loans for a total of $78.3 million to support the construction of two wind farm plants in the Dominican Republic. The wind energy projects, part of the country’s new investment in electric powerproduction, will add a total of 80.6 megawatts to the existing electricity production capacity, estimated at 3000 megawatts.

The new wind farms, which are being developed by private companies, reflect the growing confidence in the Dominican energy sector. Progress in the sector’s operating management, the new leadership of the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE) and the development of a strategic plan represent determining factors for the sector´s future development of the sector and plans to expand sources of energy production.

These wind farm plants, among the first to be constructed in the Dominican Republic, will help the country diversify its energy matrix, which currently depends almost exclusively on fossil fuels such as oil and natural gas for electricity production. The wind power projects will take advantage of incentives created by a recent law to develop electricity production from nontraditional, renewable sources.

A $50.7 million loan will support the Parques Eólicos del Caribe (PECASA) project, under development by a business consortium made up of Gamesa, Grupo Delta Intur, Aquiles Mateo and Miguel Ángel Muñiz, to install 25 Gamesa G90 wind turbines with a capacity of 2 megawatts each in the locality of Guanillo, in the southern province of Monte Cristi. The total cost of this wind farm is estimated at $127 million.

Another $27.6 million loan to Grupo Eólico Dominicano, a company controlled by the Spanish group Inveravante,will help finance the installation of 17 Vestas V90 wind turbines, with a capacity of 1.8 megawatts each, in the locality of Baní, in the Peravia province, to the west of Santo Domingo. The total cost of this wind farm will be on the order of $68.9 million.

In both cases, 138-kilovolt transmission lines will be constructed to connect the wind farms to the national electric grid, and civil engineering works will be constructed, including access roads, substations and control stations, and foundations and platforms for the turbines.

The wind farms will sell the power produced to the CDEEE based on 20-year power purchase agreements.

These wind power projects will increase the production of clean energy in the Dominican Republic and reduce its vulnerability to oil price fluctuations. In addition, the wind farms will allow the country to reduce its greenhouse gas emissions by an average amount of 144.000 tons of carbon dioxide per year. Both wind farms may qualify for obtaining certified reductions of carbon dioxide emissions.

Similarly, the wind energy projects will foster the transfer of technology and specialized knowledge during both their construction and operating phases.  Both loans were granted for a 15-year term with interest rates subject to market conditions.

The IDB will continue to contribute its support for modernization and sustainable development in the Dominican electricity sector, providing financing and technical assistance in various areas, including distribution and tele-metering.