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Green fund approved to boost clean energy technologies in Latin America

Geothermal included in renewable energy technologies set to benefit from Latin American fund

The fund is set to boost developments in geothermal technology
The fund is set to boost developments in geothermal and other renewable energy technologies in Latin America

An investment fund has been set up to boost developments in geothermal technology in Latin America and the Caribbean.

The Inter-American Development Bank (IDB) has approved a USD 30m loan for the Emerging Energy Latin America Fund II, designed to boost the private sector as a driving force in clean technologies and renewable energy in the region.

The new fund will invest in renewable energy projects including wind, solar, small hydropower and geothermal. It will also invest in energy service companies using clean technologies, including waste-management, biomass, energy efficiency and smart-grid projects.

Daniela Carrera-Marquis, head of the financial markets division at the IDB's structured and corporate finance department (SCF), said: “This financing is part of the IDB’s commitment to develop mechanisms to support long-term funding of renewable energy and clean technology projects in the region, which stimulate innovation, job creation and green economic growth.”

Latin America and the Caribbean are expected to see their energy demand increase by 75 per cent by 2030, and renewable energy could account for half of that total demand, according to Andrés Ackermann, the IDB project team leader.

The IDB’s support of the fund fits in with the Bank’s commitment to help mitigate the impact of climate change.

The fund will be managed by Stamford, Connecticut-based Emerging Energy and Environment, LLC, which specialises in clean and renewable energy, clean technologies, climate change and environment and low-carbon infrastructure investments and advisory services.

The IDB loan is expected to be supplemented by contributions from equity investors to include International Finance Institutions and other local and international capital sources.

The eventual size of the Emerging Energy Latin America Fund II is targeted at approximately USD 150m. The Emerging Energy Latin America Fund II is the successor to a previous CleanTech Fund, an earlier stage USD 25.2m fund that had a similar focus on renewable energy and clean technology and was supported by the IDB’s Multilateral Investment Fund.

John Paul Moscarella, founder and senior managing director of Emerging Energy Latin America Fund II, said: “We are pleased to partner once again with the IDB Group and work together to provide important resources to reach a common objective of promoting green investments, supporting a more sustainable region.”