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Costa Rica to sign loan with Japan for expansion of geothermal energy projects

August 17, 2014

A delegation led by President Luis Guillermo Solís on Monday will meet with representatives of the Japanese government to sign a $550 million loan to finance the construction of three geothermal power plants in the northwestern province of Guanacaste.

Japan International Cooperation Agency (JICA) President Akihiko Tanaka will meet with Solís at the event, along with Finance Minister Helio Fallas, Foreign Minister Manuel González, Environment Minister Edgar Gutiérrez, Planning Minister Olga Sánchez and Costa Rican Electricy Institute (ICE) Executive President Carlos Obregón.

The projects – Pailas II and Borinquen I and II – are expected to generate 55 megawatts each and will be developed by ICE in an area near the Rincón de la Vieja Volcano National Park.

The projects will have generation capacity similar to ICE’s Miravalles I and II plants, which together currently supply 4 percent of the country’s electricity consumption. ICE expects all three new projects to be fully operational by 2020.

The Japanese loan will cover 75 percent of the project’s total costs, estimated at some $900 million. The remainder will be covered by ICE and a $70 million loan from the European Investment Bank, approved last November.

The Japanese loan was unanimously approved by the Legislative Assembly in April, and granted under favorable conditions for ICE, including a 40-year term with a 10-year grace period at 0.6 percent interest.

On Tuesday Tanaka will visit a biodiversity conservation project JICA is developing jointly with the Costa Rican National System of Conservation Areas at Barra del Colorado National Wildlife Refuge in the northern Caribbean. Later that day the Japanese official will travel to El Salvador.

Public sector companies generate 74 percent of the electricity needs in Costa Rica. Private generators provide 17 percent and other distributors supply the remaining 9 percent, ICE reported in April.

More than 90 percent of the energy consumed in the country comes from renewable sources: 71.9 percent is generated at hydroelectric plants; 13.9 percent at geothermal plants; 5.2 percent at wind farms and 0.8 percent is generated from biomass, according to the agency.

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