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Program to Modernize Electricity Grid in Dominican Republic

PROJECT/PROGRAM NEWS 

$78 million loan will support distribution grid program and reduction of electricity waste

6 June 2014 – The Inter-American Development Bank (IDB) has approved $78 million loan to the Dominican Republic to support financing of a program to modernize its electrical distribution grid and reduce electricity waste.  This project, which is in line with the Integrated Electricity Sector Plan for 2013-2016, seeks to ensure the proper functioning of the entire commercial circuit, including not only the overhaul of grids but also the measurement, billing and payment collection for electricity that is delivered, with special emphasis on the institutional strengthening of the companies that provide this service to the country, by improving the technical and commercial management that they conduct.

140606-pmwj24-dominican-IMAGEThe program is important because, despite progress made by the Caribbean country, electricity distribution in the Dominican Republic continues to perform poorly in its operations, with electricity waste averaging 33 percent at the close of 2013. This is far above international standards of efficiency and exerts a negative impact on the financial sustainability of Electricity Distribution Companies (EDEs in Spanish).

The program will help ease the fiscal burden that the sector represents and enhance the country’s productivity. The overall goal of the program is to boost the electricity sector’s financial sustainability by cutting total electricity waste in the distribution system and to improve the operation and marketing of services provided by Electricity Distribution Companies. Yet another objective is to enhance the quality of the supply of electricity to end users.

With this project the IDB hopes to contribute to the country’s Program for Waste Recovery and Commercial Improvement (PRPCM in Spanish) so as to reduce electricity waste, improve the system of cost recovery by raising the number of registered customers and promote payment for electricity services, as well as efficient use of energy and quality service.

With the implementation of this phase of the PRPCM, the idea is to reduce electricity waste by at least 10 percentage points, taking it from the 33.1 percent recorded at the end of 2013 to 23.1 percent in 2017.  In order to achieve this, the program calls for overhauling priority electrical circuits, improving measuring systems, strengthening commercial management and achieving continuity in institution-building.

The main results from the program are expected in the first three years and are related to improvements in Electricity Distribution Companies in three main ways: operational efficiency, commercial management and quality service. For more about this project, go to http://www.iadb.org/en/projects/project-description-title,1303.html?id=DR-L1034

For more about IDB projects in the Dominican Republic, navigate to http://www.iadb.org/en/countries/dominican-republic/dominican-republic-and-the-idb,1089.html

Established in 1959, the Inter-American Development Bank (IDB) is a source of multilateral financing for sustainable economic, social and institutional development programs and projects throughout Latin America and the Caribbean.  More information about the IDB is at www.iadb.org.  For more about IDB projects, visit http://www.iadb.org/en/projects/projects,1229.html.

Source: Inter-American Development Bank