SANTO DOMINGO, Dominican Republic -- IFC, a member of the World Bank Group, and the IFC African, Latin American and Caribbean Fund (IFC ALAC Fund), have announced a joint $100 million equity investment to help InterEnergy Holdings (IEH) develop cleaner and more efficient energy sources in the Caribbean and expand operations in Latin America.
IFC and the IFC ALAC Fund, which is managed by the IFC Asset Management Company, will each provide $50 million in equity to IEH, a company focused on the power sector in the Caribbean and Latin America, and one of the leading private investors in power generation, transmission and distribution in the Dominican Republic.
“IFC’s equity investment together with the IFC ALAC Fund is a natural evolution of our long-term partnership with IFC, which was a lender to IEH portfolio companies in the past,” said Rolando Gonzalez Bunster, IEH’s chairman and CEO. “We will work together to bring more reliable, cost-efficient and cleaner energy production to the Dominican Republic and also plan to be directly involved in the development of power sector solutions for Haiti, facilitating economic development in the island of Hispaniola.”
IFC and the IFC ALAC Fund’s investments will help IEH expand and upgrade its existing operations and develop new projects to diversify the Dominican Republic’s energy sources, thereby reducing the country’s reliance on fuel oil for power generation. These investments are expected to save fuel costs by increasing the country’s capacity to import liquefied natural gas, while also developing renewable energy sources, such as wind and solar power. The high cost of energy and the need for power sector subsidies has long been a significant constraint to the Dominican Republic’s economic growth and macro-economic stability.
In addition, IEH plans to leverage its vast footprint in the Dominican Republic as well as its team’s experience in the Caribbean and Latin America to extend its reach into other markets in the region, thus strengthening and diversifying its portfolio of assets. IEH is in discussions to make important investments in Haiti, where it expects to play a significant role in the development of the power sector in the future. The company is also considering investments in other countries in the region.
“In the Caribbean power sector, IEH has an established track record of achieving both high developmental impact and commercial success,” said Jean Philippe Prosper, IFC director for Latin America and the Caribbean. “This investment fits with IFC’s strategy in the Caribbean to improve competitiveness through improved access to infrastructure services, and mitigate climate change by developing cleaner energy sources.”
Sujoy Bose, chief investment officer and head of the IFC ALAC Fund, added, “We are pleased to be investing in IEH to facilitate its expansion and growth. IEH is embarking on an exciting future as it seeks to leverage its existing distribution and generation assets by diversifying into more efficient fuel sources which will lead to the reduction of its power generation costs and thereby lower costs for the consumer.”