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Energía Eólica de Honduras S.A

$82.4 million
Project Brief

Project description

On December 20, 2013, MIGA issued a guarantee of $82.4 million supporting an investment by Globeleq Mesoamérica Energy S.A. of Panama[1][2] in Energía Eólica de Honduras S.A. (also known as Cerro de Hula) in Honduras. The coverage is for a period of up to 20 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The project consists of the development in two phases of a 126 megawatt wind park located 20 kilometers south of the capital city Tegucigalpa, between the municipalities of Santa Ana and San Buenaventura. The construction of phase one has been completed and started commercial operations in December 2011. Phase two, currently in development, involves the expansion of the power plant by adding 24 megawatts of additional capacity through the installation of five G-87 and seven G-97 Gamesa wind turbines.

The project will supply relatively cheap, clean, and renewable energy in one of the region’s poorest countries. It will diversify Honduras’s energy matrix, as about 60 percent of the country’s electricity generation currently comes from sources that are derived from fossil fuels. Approximately 270 tons of greenhouse gas emissions will be eliminated by replacing these thermal sources with wind power.

In addition, most of the project’s electricity will be generated during the dry season, when the country’s hydropower capacity (which contributes 37 percent of Honduras’ energy requirements) is significantly reduced.

The project will help stabilize the country’s energy costs by decreasing the use of imported oil. This will also lower the volatility of electricity tariffs during the 25-year term of the power-purchase agreement with the state-owned utility.

Approximately 150 temporary jobs will be created during the construction of phase 2 and the plant will employ more than 40 people on an ongoing basis. Training programs will be provided to permanent personnel.

As a major foreign direct investment in Honduras, the project is expected to have a significant demonstration effect by increasing private-investor confidence in the Honduran economy and the country’s institutions.

This project is aligned with the World Bank Group Country Assistance Strategy for Honduras, particularly with regard to developing renewable energy connections to the country’s grid.

MIGA’s support for this project is aligned with the Agency’s priorities of insuring investments into countries eligible for financing from the International Development Association as well as insuring complex projects.

[1] As of June 2, 2014 Globeleq Mesoamerica Energy S.A. of Panama as a Guarantee Holder was replaced by Globeleq Mesoamerica Energy (Wind) Limited of Bermuda.

[2] As of June 21, 2017 Globeleq Mesoamerica Energy (Wind) Limited as a Guarantee Holder was replaced by  Investment Energy Resources Limited.