Guatemala power distribution set to receive US$175mn injection

Approval is pending for financing of up to US$175mn to strengthen Guatemala’s power distribution grid.

The funds target distributors Deorsa and Deocsa, known collectively as Energuate, IFC information shows.

The proposed transaction entails a 10-year senior unsecured loan for up to US$100mn from the multilateral lender, which expects to mobilize up to US$175mn including other development finance institutions.

The proceeds will be used to finance part of Energuate’s investment plan which runs through end-2025 and focuses on the interconnection of new users, energy loss control and reduction initiatives, and equipment replacement.

Energuate is Guatemala’s largest power distributor with 91,557km of network and over 2.3mn users, predominately in rural areas. The other distributor is EEGSA.

Fitch Ratings recently upgraded Energuate Trust's long-term and foreign currency issuer default ratings and its US$330mn bond due in 2027 to 'BB'. The outlook is stable.

“[Energuate’s] rural service area presents financial and operational challenges, including high energy theft, violent crime and an underdeveloped formal economy. Energy losses amounted to 18.7% in 2022 and have averaged a high 19.7% since fiscal 2017,” said Fitch.

POWER SUPPLY CALL

Meanwhile, power regulator CNEE approved awards by Energuate and EEGSA in process 1-2023 to help cover demand from May 1 this year to April 30, 2025. Energuate sought up to 68MW and EEGSA up to 80MW.

Energuate award (Source: CNEE)

EEGSA awards (Source: CNEE)

The no-objection from the watchdog is available here and in the Documents box in the upper-right corner.

In follow up, the watchdog greenlighted reference terms submitted by Energuate to procure capacity not awarded in the process.

Also read Guatemala extends deadline for long-term power supply call