IFC Fuels Peru’s Renewable Energy Ambitions with $600 Million Finance
In a move set to redefine Peru’s clean energy landscape, the International Finance Corporation (IFC), part of the World Bank Group, has approved a corporate loan of up to US$600 million for ENGIE Energía Perú. As one of Peru’s foremost power generation companies, ENGIE is poised to use this financing to accelerate its renewable energy projects and advance the country’s transition towards a low-carbon economy.
The initial US$120 million tranche comes in the form of a Green and Sustainability-Linked Loan, marking the first such collaboration between IFC and ENGIE Perú. This structure aligns with international standards from the Loan Markets Association and the International Capital Market Association, signalling a commitment to robust, globally recognised sustainability practices.
Funding the Next Wave of Renewable Projects
The capital infusion will be directed to three high-impact initiatives:
- Central Expansión Solar Intipampa, Moquegua (51.7 MW): Expanding solar capacity in Peru’s south to harness one of the country’s richest solar resources.
- Refinancing of Duna and Huambos Wind Farms, Cajamarca (36.8 MW): Enhancing financial efficiency and operational sustainability for established wind assets.
- Chilca-BESS Battery Energy Storage System (26.5 MW): Integrated with the ChilcaUno Thermal Power Plant, this project will improve grid stability and optimise renewable integration.
These projects are designed not only to increase renewable generation capacity but also to bolster Peru’s energy resilience in the face of climate change.
Linking Finance to Measurable Impact
This loan is more than a capital boost, it’s tied to three Key Performance Indicators (KPIs) that ensure tangible benefits:
- Boosting Renewable Share: Increasing the proportion of renewables in ENGIE Perú’s total installed capacity, addressing challenges posed by grid constraints and market limitations.
- Climate Adaptation Plans: Implementing targeted adaptation strategies across all facilities, positioning ENGIE Perú as a leader in climate resilience.
- Gender Equity: Raising the representation of women in management roles, breaking barriers in a male-dominated sector.
Cheryl Edleson, IFC’s Director for Infrastructure, Energy, and Mining in Europe, Latin America, and the Caribbean, emphasised the wider benefits: “This green and sustainability-linked loan reflects our commitment to developing energy solutions that not only drive economic growth but also promote job creation, climate resilience, and access to clean energy. This is a bold step toward a cleaner, more inclusive energy future for Peru.”
Strengthening ENGIE’s Market Leadership
El Mehdi Ben Maalla, Country Manager and CEO of ENGIE Energía Perú, outlined the strategic significance: “The loan granted by IFC enables us to continue expanding our portfolio of renewable energy projects while meeting the highest local and international standards in risk management, environmental and social impact, resource efficiency, health, and safety. It is a clear sign of trust in our vision for sustainable growth.”
ENGIE Perú already generates around 30% of its output from renewables, with an ambitious development pipeline exceeding 1,600 MW. The IFC’s backing positions the company to accelerate this trajectory, reinforcing its leadership in Peru’s clean energy transition.
IFC’s Broader Development Mandate
IFC, the largest global development institution focused on the private sector in emerging markets, operates in more than 100 countries. In fiscal year 2024, it committed a record US$56 billion to private companies and financial institutions, leveraging private capital to foster markets and opportunities in developing economies. Its work aligns with the World Bank Group’s vision of eradicating poverty while building a livable planet.
For IFC, this deal underscores a growing emphasis on financing innovative, scalable solutions in the renewable sector, particularly in regions with untapped potential.
ENGIE’s Global Vision for Net Zero
Globally, ENGIE employs 98,000 people across 30 countries and is committed to achieving net-zero carbon emissions by 2045. The group’s portfolio spans renewable electricity, green gas production, battery storage, energy distribution networks, and local heating and cooling infrastructure. With annual investments exceeding €10 billion, ENGIE is a key driver of the global energy transition.
In Peru, these investments reflect a dual strategy: increasing the availability of clean energy while ensuring the infrastructure is resilient to climate impacts.
Vast Energy Potential
Peru’s renewable energy potential is vast, with significant untapped solar and wind resources. However, challenges remain, from transmission constraints to the need for advanced storage systems. This IFC loan helps bridge those gaps by:
- Enabling large-scale renewable projects.
- Financing grid stability solutions through battery storage.
- Encouraging gender diversity and inclusion within the sector.
- Setting an example for sustainability-linked financing in Latin America.
These initiatives could serve as a model for other nations in the region seeking to align energy growth with environmental and social progress.
Driving a Sustainable and Inclusive Energy Future
This partnership between IFC and ENGIE Energía Perú is more than a financial transaction, it’s a statement of intent. By linking capital to measurable sustainability outcomes, it sets a precedent for future infrastructure financing in Latin America.
With its blend of renewable expansion, climate resilience, and social inclusion, the deal marks a pivotal step in building a cleaner, fairer, and more energy-secure Peru.
