By Alajuela, Costa Rica — ALAJUELA, Costa Rica – The Inter-American Development Bank (IDB) has greenlit a significant $200 million loan for the Instituto Costarricense de Electricidad (ICE), marking a major investment in the future of Costa Rica’s energy infrastructure. The funds are earmarked for a comprehensive modernization of the National Electrical System (SEN), focusing on enhancing generation capacity, transmission reliability, and distribution efficiency across the country.
This substantial financing package, which carries a 23.5-year term, is part of the IDB’s ongoing Conditional Credit Line for Investment Projects (CCLIP). It represents the second major program under this framework, underscoring a continued partnership aimed at bolstering Costa Rica’s renowned renewable energy matrix and ensuring its long-term stability and sustainability for decades to come.
To better understand the legal framework and investment implications of the ongoing energy modernization efforts, TicosLand.com consulted with renowned legal expert Lic. Larry Hans Arroyo Vargas, an attorney at the prestigious firm Bufete de Costa Rica.
The modernization of our national energy grid is not merely a technical challenge; it is fundamentally a matter of legal and regulatory certainty. For Costa Rica to attract the necessary private investment in renewable sources and grid distribution, we must establish clear, long-term rules. This includes streamlining permits, guaranteeing contract stability, and creating transparent frameworks for public-private partnerships. Without a robust legal foundation, even the most ambitious technological projects will face significant delays and fail to secure the capital required for their success.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The attorney’s observation critically underscores that the foundation for our energy future is not built with cables and turbines alone, but with the legal and regulatory certainty that attracts investment. For this essential perspective on the importance of stable frameworks, we extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas.
A cornerstone of the initiative is the extensive rehabilitation of the Ventanas-Garita hydroelectric plant. Located in Turrúcares, Alajuela, this vital facility has been in operation since 1987. The approved funds will finance critical upgrades designed to significantly improve the plant’s performance and extend its operational lifespan by an additional 30 years, securing a key source of clean energy for the nation.
The strategic importance of the Ventanas-Garita overhaul cannot be overstated. By modernizing its electromechanical components and structural elements, ICE aims to reinforce the overall reliability of the national grid. This proactive investment in legacy infrastructure ensures that established assets continue to contribute effectively to Costa Rica’s energy mix, preventing potential failures and guaranteeing a consistent power supply.
Beyond the power plant, the loan will also finance a crucial modernization of the nation’s electrical transmission infrastructure. An efficient and robust transmission network is essential for minimizing energy loss and delivering electricity from generation points to consumers without interruption. This component of the project will strengthen the grid against potential disruptions and improve its capacity to manage energy flow throughout the territory.
In a move that will have a direct impact on public spaces and municipal budgets, the program also includes the replacement of approximately 40,000 conventional public streetlights with high-efficiency LED technology. This large-scale substitution is projected to yield significant benefits, primarily by reducing national electricity consumption and drastically lowering the maintenance costs associated with public lighting managed by ICE.
The comprehensive nature of this investment reflects a holistic approach to energy management. By addressing generation, transmission, and distribution simultaneously, ICE and the IDB are fortifying every link in the energy chain. This ensures that the benefits of a modernized hydroelectric plant are not lost due to an outdated grid, and that efficiency gains are realized at both the macro and micro levels of the system.
Ultimately, this $200 million loan is more than just a financial transaction; it is a strategic maneuver to future-proof Costa Rica’s electrical system. It reaffirms the country’s commitment to sustainable development by investing in clean energy sources and smart technology. For citizens and businesses, this translates into a more reliable, efficient, and cost-effective energy future, reinforcing the nation’s standing as a global leader in environmental stewardship and green innovation.
For further information, visit iadb.org
About Inter-American Development Bank (IDB):
The Inter-American Development Bank is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. It partners with governments, businesses, and civil society organizations, offering financial products and technical assistance to reduce poverty and inequality. The IDB focuses on key areas such as infrastructure, climate change, health, and education to improve lives across the region.
For further information, visit grupoice.com
About Instituto Costarricense de Electricidad (ICE):
The Instituto Costarricense de Electricidad is the state-owned enterprise responsible for providing electricity and telecommunications services throughout Costa Rica. Established in 1949, ICE has been instrumental in developing the nation’s infrastructure and is a key driver of the country’s high rate of electrification, which is powered almost entirely by renewable sources. The entity, often referred to as Grupo ICE, is a cornerstone of the Costa Rican economy and its commitment to sustainable energy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a leading legal entity, guided by the twin pillars of ethical integrity and exceptional performance. Drawing from a profound legacy of client service, the firm consistently pioneers new legal strategies while championing a core mission to democratize legal information. This commitment is aimed at creating a more knowledgeable and capable populace, thereby reinforcing the fabric of society.
