The Inter-American Development Bank (IDB) has approved a $200 million loan to enhance Costa Rica’s electricity system, aiming to make it more reliable, efficient, and sustainable. The financing marks the second phase of a broader program designed to expand the nation’s renewable energy capacity and improve power transmission and distribution infrastructure.
The initiative will directly benefit nearly two million consumers connected to Costa Rica’s National Electric System, covering about 99.4% of the population, including households, businesses, and industries. Additionally, it will improve the public lighting system, increasing safety and quality of life for around 350,000 residents in rural and peri-urban areas.
By strengthening Costa Rica’s electricity grid, the program will also improve the reliability of the regional electricity market shared with five other Central American nations. It will further enhance the technical and institutional capacity of the Costa Rican Electricity Institute, which oversees much of the country’s energy infrastructure.
The project includes key upgrades to the Ventanas-Garita Hydroelectric Plant, ensuring its continued operation for another 30 years. It will also modernize transmission lines and replace around 40,000 traditional streetlights with energy-efficient LED models. The $200 million IDB loan has a 23.5-year repayment term with a 7-year grace period and is tied to the Secure Overnight Financing Rate (SOFR). The Costa Rican government will contribute an additional $115 million in local funding to support the project.
