2024.07.18
On May 9, the Japan International Cooperation Agency (JICA) signed a loan agreement of up to 75 million US dollars with ENERGUATE, an electricity distributor operating and headquartered in Guatemala, and held the closing ceremony in Guatemala City on July 17. JICA loan proceeds will be utilized mainly for installation, maintenance and replacement of distribution network facilities across 20 rural departments in the nation. This project marks JICA’s first transaction in Guatemala under its private-sector finance operations, and is co-financed with International Finance Corporation (IFC) which signed a loan agreement of up to 100 million US dollars with ENERGUATE.
Guatemala faces significant domestic disparities, with rural areas still suffering from low income levels and limited access to electricity, largely due to the impact of a civil war that lasted over 30 years. Although half of the national power supply already comes from renewable sources (primarily hydropower), rural areas reportedly still rely on wood stoves for cooking and other purposes. As a result, Guatemala is said to have the highest per capita firewood consumption in Central America, leading to serious socioeconomic concerns such as negative health effects, greenhouse gas emissions, deforestation, and poor energy efficiency. The Guatemalan government estimates that 60–70% of households cooking with wood lack proper ventilation systems and that 5–20% of families in extreme poverty cook and sleep in the same area.
The provision of a loan to ENERGUATE which supplies electricity to 20 rural departments of Guatemala’s 22 departments, where electricity grid connection rate is below 99%, will finance improvements in electric energy service quality in medium and low voltage networks, new connections, energy loss reduction programs and support the electrification processes that the distributor has been carrying out, among other aspects such as promote the use of renewably sourced electricity as an alternative to wood across the nation, thereby contributing to SDGs Goals 7 (Affordable and clean energy), 10 (Reduced inequalities), 13 (Climate action), and 17 (Partnerships for the goals). The project also aligns with the Facility for Accelerating Climate Change rEsilient and Sustainable Society (ACCESS), the establishment of which was announced by Prime Minister Kishida Fumio at the Partnership for Global Infrastructure and Investment, a side event of the G7 Summit, in May 2023.
[Note] ENERGUATE is legally separated into two entities, namely Distribuidora de Electricidad de Oriente S.A. and Distribuidora de Electricidad de Occidente S.A., and commercially registered as such. For practical purposes, the two entities are more commonly referred to collectively as ENERGUATE than by their registered corporate names.
At the closing ceremony
A family supplied with electricity by ENERGUATE’S distribution service (Photo credit: ENERGUATE)
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