CIF funds approve US$85 million to boost energy transition in the Dominican Republic

This press release was published in English using an automatic translation system

Ministry of Energy and Mines

WASHINGTON. The Dominican Republic has received the support of the Board of Directors of the Climate Investment Funds (CIF) with the approval of an investment plan of 85 million dollars, with a view to continuing to transform the country's energy system and strengthen its energy independence, promoting the transition towards clean and sustainable energies.

The financing will mobilize more than 1.1 billion dollars from the private sector, facilitating access to innovative financial mechanisms that guarantee a sustainable, affordable and secure energy transition.

The project is part of the Accelerated Coal Transition Investment Program (ACT), a multilateral platform that supports middle-income countries in their transition to cleaner energy sources and will be implemented in collaboration with the Inter-American Development Bank (IDB), IDB Invest and the World Bank Group, with the aim of ensuring energy security, reducing energy import costs and promoting the development of local communities.

During the presentation of the plan, the Minister of Energy and Mines, Joel Santos, highlighted the importance of innovative financial mechanisms, which he said will not only facilitate access to the 85 million dollars, but will also mobilize additional resources from the private sector to improve transmission networks and energy infrastructure.

Santos thanked the CIF and multilateral banks for their support in creating this solid investment plan and stressed that the collaborative approach will be key to ensuring a sustainable and resilient energy future for the Dominican Republic.

She also thanked the National Council for Climate Change, the CIF focal point in the Dominican Republic, for its support and guidance in this process.

"We will continue to work on the implementation of this plan, which will not only improve our energy infrastructure, but will also foster an enabling environment for investments that benefit the economy and the population," said the minister.

Meanwhile, Max Puig, executive vice president of the National Council for Climate Change and Clean Development Mechanism, said that this CIF Funds program is a clear example of how climate financing has the capacity to positively impact the economy and society of developing countries, also improving resilience.

“The approval of this Investment Plan marks a decisive step in the efforts to consolidate resilient, sustainable, low-carbon economic and social development that ensures a fair energy transition in the generation of electric energy, which not only has value in mitigating the causes of climate change, but also improves the Dominican economy's ability to adapt to its effects, making it more independent and sovereign in terms of energy,” he said.

For her part, Tariye Gbadegesin, CEO of the Climate Investment Funds, highlighted the importance of this project to transform the Dominican Republic's electricity sector. “We are proud to support the Dominican Republic's decision to begin transforming its energy system so that it can better serve businesses and communities. This is a key step that will strengthen the country's energy security,” she said.

Katharina Falkner-Olmedo, IDB representative for the country, said that the plan will contribute to generating clean energy, strengthening energy security and creating jobs, thanks to the synergy between the public and private sectors. “This effort will also consolidate the country’s position as a regional leader in this field,” she said.

Meanwhile, Elizabeth Martínez de Marcano, regional director of the International Finance Corporation (IFC) for Colombia, Mexico, Central America and the Caribbean, highlighted the significant progress that this support represents. “The support of the CIF is a milestone in the Dominican Republic’s energy transition efforts. This initiative seeks to strengthen energy security, encourage private sector participation and promote sustainability and economic growth,” said Martínez de Marcano.

Next, Alexandria Valerio, World Bank representative for the Dominican Republic, highlighted the need to eliminate dependence on coal and highlighted the importance of concessional financing from the CIF to attract significant co-financing that will improve energy security, reduce greenhouse gas emissions and promote the socioeconomic well-being of local communities. “This effort will also contribute to the reduction of emissions and the well-being of communities,” she said.

During the presentation of the plan, Rafael Gómez, Vice Minister of Energy, and Chadia Abreu, Advisor on Clean Energy and Climate Solutions, were present, while Sara González, Technical Director, and Rodrigo Fincheira, Advisor on International Relations, were present on behalf of the National Council for Climate Change, the Dominican Republic's focal point for the CIF.

About the investment plan

The investment plan is structured around three fundamental pillars: governance, communities and gender policies, and infrastructure. Its objective is to diversify the country's energy matrix, improving the electricity transmission system to integrate renewable energy sources, such as solar and wind, and guarantee the capacity to dispatch and store these sources.

This approach seeks to reduce dependence on coal and strengthen the resilience of the electrical system.

It also includes socio-economic and regulatory measures to support communities affected by changes in the energy sector. Opportunities for retraining and alternative livelihoods will be offered to workers at thermal power plants and the communities dependent on them.

The Dominican Republic has been a key player in this process since 2021, when President Luis Abinader signed an expression of interest to participate in the program. In 2022, the first preparation funds were approved, for an amount of 500,000 dollars to develop the investment plan.