French energy company ENGIE secures $600 million from the World Bank Group and investors to bolster Peru's renewable energy sector.
ENGIE Energía Perú Secures $600 Million for Renewable Energy Expansion
In a significant move towards a greener future, ENGIE Energía Perú (EEP) has secured $600 million in funding from the International Finance Corporation (IFC) to accelerate its net-zero emissions goal. This funding will be used to expand renewable energy and energy storage projects in Peru.
The funds will primarily finance three key projects:
- The construction of the Central Expansión Solar Intipampa solar plant in Moquegua, with a capacity of 51.7 MW.
- The refinancing of the Duna and Huambos wind farms in Cajamarca, totaling 36.8 MW capacity.
- The development of part of the Chilca-BESS battery energy storage system (26.5 MW) at the ChilcaUno Thermal Power Plant.
The financing, structured as a Green and Sustainability-Linked Loan, is designed to comply with international standards and push EEP towards a low-carbon energy transition. This loan is part of ENGIE's global strategy aiming for net-zero greenhouse gas emissions by 2045.
ENGIE's renewable and conventional installations in Peru include the Punta Lomitas Wind Farm (296 MW), expanded solar capacity with Intipampa, hydro and gas-fired plants such as Chilca and Ilo, and the Chilca BESS. By 2025, ENGIE targets 50 GW of renewable capacity worldwide, including projects like those in Peru, contributing towards the company’s climate goals validated by the Science Based Targets initiative aligned with the Paris Agreement.
The IFC predicts that by 2050, wind and solar could make up 45% of installed capacity in Peru, backed by investments in grid storage. This renewable capacity expansion focuses on wind, solar, hydro, and green hydrogen projects.
ENGIE supports strong carbon pricing policies and systems that encourage investment in low-emission technologies, energy efficiency, and reduced energy use. By 2030, ENGIE aims to have 10 GW of battery capacity for energy storage. The company has already made significant strides in reducing its direct emissions (Scope 1), cutting them by over 40% from 2017 to 2024, mainly due to retiring coal assets and switching to clean energy.
The funds will also be used to support climate adaptation and promote gender diversity initiatives. ENGIE plans to carry out internal carbon absorption projects and use carbon removal credits, following the Integrity Council's ten principles. The financing structure is a Sustainability-Linked Loan (SLL), which links financial terms to performance goals.
This investment in Peru may serve as a model for transformative growth in Latin America's energy sector. Spain's Zelestra is investing $1-1.5 billion in Peru's renewable energy, supporting mining operations with a pipeline of 1 GW capacity.
ENGIE's global decarbonization ambitions aim to achieve net-zero greenhouse gas emissions by 2045. The investments aim to help ENGIE reach its goal of adding 800 MW of non-conventional renewables in five years. ENGIE's climate roadmap includes Science Based Targets initiative (SBTi) validation, aligning with the Paris Agreement’s 1.5°C goal.
[1] IFC (2021). IFC invests $600 million in ENGIE Energía Perú’s renewable energy projects. [online] Available at: https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/news/ifc-invests-600-million-in-engie-energia-perus-renewable-energy-projects
[2] ENGIE (2021). ENGIE secures $600 million for renewable energy expansion in Peru. [online] Available at: https://www.engie.com/en/news/engie-secures-600-million-for-renewable-energy-expansion-in-peru
[3] Science Based Targets initiative (2021). ENGIE commits to net-zero emissions by 2045. [online] Available at: https://sciencebasedtargets.org/news/engie-commits-to-net-zero-emissions-by-2045
- The investment in ENGIE Energía Perú's renewable energy projects will aid in the removal of carbon and contribute to the global shift towards clean energy.
- Science-based research is essential for the successful implementation of renewable energy projects like those being funded by ENGIE Energía Perú.
- By 2050, it is predicted that clean energy sources such as wind and solar will make up 45% of Peru's total installed capacity, thanks in part to investments like the one secured by ENGIE Energía Perú.
- Data and cloud computing technologies are crucial for optimizing renewable energy projects, ensuring they operate at maximum efficiency and contribute to a sustainable lifestyle.
- As the cost of renewable energy continues to decrease, it is likely that more sectors such as home-and-garden, sports, and auto-racing will begin to incorporate renewable energy and battery storage systems into their operations.
- The expansion of renewable energy projects will have a positive impact on the environment, reducing air pollution and mitigating the effects of climate change.
- As renewable energy continues to gain traction, it is essential for the finance industry to prioritize investments in clean energy to accelerate the transition away from fossil fuels.
- Meeting renewable energy targets set by the Paris Agreement will require a concerted effort from the energy industry, environmental science, and government policies aimed at promoting sustainable living.
- The use of battery storage systems like those being developed by ENGIE Energía Perú will be essential for managing intermittent renewable energy production and ensuring a stable energy supply.
- Collaborative efforts between companies like ENGIE Energía Perú, the International Finance Corporation, and governments are crucial for the successful transition to a renewable energy-dominated future, keeping in mind the importance of gender diversity initiatives in shaping the energy sector.
