19 October 2012: The Inter-American Development Bank (IDB) has approved US$200 million in financing for Central America’s largest renewable energy project, the construction of a 305.5 megawatts (MW) hydroelectric plant in Costa Rica’s Limon Province.

Once built and put into operation, the plant is expected to generate 1,407 gigawatt-hours (GWh) of electricity per annum, or about 10% of Costa Rica’s installed power generation capacity.

The IDB loan covers assistance to the state-owned firm in charge of the project, the Costa Rican Electricity Institute (ICE), in the design, construction, operation and maintenance of the hydropower plant and associated infrastructure such as transmission lines and substations. The project will involve a 130-meter high dam on the Reventazón River, with the creation of a 6.9 square km reservoir and a 4.2 km diversion of the river.

The construction, reservoir and river diversion is estimated to impact at least 471 species of fauna, 34 of which are endangered and 58 threatened, and 193 species of flora, 15 of which are considered endangered and six threatened. As a result, the loan requires the project to conduct a wildlife rescue operation and establish an offset for the river habitat that is considered the first of its kind in Central America. The loan also calls for the project to contribute to the Jaguar Corridor Initiative, an initiative organized by charities and conservation groups to provided protected areas for the cats from Mexico to northern Argentina.

The 20-year non-sovereign guaranteed loan is expected to be leveraged to get a syndicated loan of around US$450 million and co-financing from third-party institutions of US$294 million. [IDB Press Release] [Jaguar Corridor Initiative]