European Investment Bank (EIB) and Naturgy Energy Group have signed a $300 million framework loan to back the modernization and expansion of Panama’s power grid, marking the largest loan signed by the EIB for a private company in Central America, the bank announced. The loan is guaranteed by Spanish export credit agency CESCE. The project will improve the reliability and efficiency of electricity supply in the country, connect new users, including low-income households, and allow greater integration of renewable energy sources.
This guarantee was developed jointly by the EIB and CESCE to support green projects led by Spanish companies outside Spain, contributing to the climate action and environmental sustainability goals promoted by the European Union within and beyond its borders. The agreement is an example of public-private sector cooperation to promote the energy transition and sustainable development in Panama. The signature event was attended by EIB Group President Nadia Calviño, Naturgy Chairman and CEO Francisco Reynés, CESCE CEO Pablo de Ramón-Laca, and several members of the government of Panama.
“This EIB financing will support the modernisation of Panama’s energy infrastructure, strengthening regional energy integration,” said EIB Group President Nadia Calviño. “It is an example of how partnerships are key to providing people with access to a cleaner and more secure energy supply.”
Naturgy Chairman and CEO Francisco Reynés added that the loan will strengthen Naturgy’s investments in Panama and reflects the company’s commitment to stay in the country.
“The new investments in Panama’s power grid will help improve service quality for our customers and security of supply, while promoting a more efficient, secure and sustainable energy model.”
The investment program will expand and modernize power distribution grids across the country, cutting technical and commercial losses while also expanding the capacity and resilience of the electricity system. It will also help connect new users and integrate renewable energy, especially solar energy. By improving the grid’s operational efficiency and reliability, the project is expected to help reduce electricity costs and strengthen energy security, benefiting the most vulnerable communities in particular.
The operation is part of the EU Global Gateway Investment Agenda for Latin America and the Caribbean, under the flagship initiative to bolster the Central American Regional Electricity Market. It will help achieve Panama’s Nationally Determined Contribution under the Paris Agreement by enabling the integration of new renewable energy capacity and improving overall system efficiency. At the recent CELAC-EU Summit in Colombia, the EIB presented a new €1 billion financing initiative to back investment in integrating power grids across Central America, supporting construction and upgrading of transmission and distribution infrastructure in Costa Rica, Panama, Honduras, Guatemala, El Salvador and Belize.
