The multi-year initiative will add battery storage, solar plants and an LNG terminal to the power grid, alongside water and sanitation projects.
The Government of El Salvador has entered into an agreement with Cox, a global integrated utility company, for a $2.9bn programme aimed at strengthening the country’s energy and water infrastructure.
The agreement was signed by President Nayib Bukele and Cox executive chairman Enrique Riquelme at Casa Presidencial. It includes the construction and modernisation of energy storage, solar power and natural gas projects, alongside water and sanitation infrastructure.
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Under the agreement, Cox will lead several strategic initiatives to boost the stability and capacity of El Salvador’s power system.
Battery storage systems connected to the national electricity grid are set to provide an initial capacity of between 440MW-hours (MWh) and 500MWh, with a potential expansion up to 1GW-hour.
These systems are expected to support grid stability and accommodate additional renewable power.
The partnership further outlines plans for two solar photovoltaic plants to be developed jointly with the Lempa River Hydroelectric Executive Commission. These plants will initially supply 200MW of power, with the option to expand to 400MW.
In addition, plans include the establishment of a liquefied natural gas (LNG) regasification terminal and a new combined-cycle power plant with approximately 380MW of generation capacity.
The agreement stipulates that El Salvador’s Government will participate as a partner in the energy projects, subject to relevant approvals.
Cox will structure financing through project finance models, working alongside international financial institutions, multilateral organisations and export credit agencies.
The company will also oversee development, construction, operation and maintenance of the projects.
The necessary approvals and detailed contracts are expected in the coming weeks, with implementation scheduled over three years.
President Bukele said: “This agreement allows us to attract international investment for cleaner and more reliable energy, as well as the technical support needed to guarantee a quality water supply, without committing new public funds and with clear rules.”
Latin America accounts for around 95% of Cox’s activities, and the company holds a wider investment plan in the region totalling more than $7bn (€6.24bn) in energy and water projects.
Its recent power sector ventures include the acquisition of Iberdrola México, the expansion of a power transmission platform in Brazil, and new renewable energy generation and storage projects across Central America.
Riquelme said: “We will put our experience as a water and energy utility at the country’s service to strengthen its power system, add more renewable energy and improve water service.
“With the natural gas terminal, El Salvador will become the region’s benchmark and its most important energy hub. We thank President Bukele and his government for the trust they have placed in Cox.”