MIGA Backs Cerro de Hula Wind Power in Honduras
Project will supply cheaper, clean, and renewable energy in one of Latin America’s
View the press release in Spanish
Washington, February 6, 2014 - The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, announced today that it has provided an investment guarantee to support the 24-megawatt expansion of the existing 102-megawatt Cerro de Hula wind project, located 20 kilometers south of Tegucigalpa.
By providing additional clean energy, the project will further reduce the country’s dependence on traditional fossil fuel generation and avoid the creation of 280,000 tons per year of carbon emissions.
MIGA’s guarantee of $82.4 million covers Globeleq Mesoamérica Energy’s new and existing equity investments in the project against the risks of expropriation, breach of contract, transfer restriction, and war and civil disturbance. The project benefits from a long-term operating agreement issued by the Honduran Secretariat of Natural Resources and Environment (SERNA) and a long-term power purchase agreement with ENEE, the Honduran state-owned power utility.
In Honduras, the electricity sector’s dependence on fuel oil means that it is subject to oil price volatility. Retail tariffs are among the highest in Central America.
“MIGA is pleased to support this project, which broadens the country’s energy mix while contributing to reducing the cost of power,” said MIGA Executive Vice President Keiko Honda.
“MIGA’s insurance gives us added comfort in our decision to expand our wind-power investment in a country that needs more power to support economic growth and development,” said Mikael Karlsson, CEO of Globeleq (Globeleq Mesoamérica Energy’s majority shareholder). “We have worked with MIGA in the past and find its insurance to be an effective risk mitigant for our investments in emerging markets.” MIGA guarantees support Globeleq’s projects in Côte d’Ivoire, Nicaragua, and Honduras.
Cerro de Hula is the first wind power plant in Honduras and remains the largest wind power plant in Central America.
MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
Mallory Saleson, MIGA
Tel: +1 202 473-0844
Rebecca Post, MIGA
Tel: +1 202-473-1964
Cara Santos Pianesi