The Inter-American Development Bank has approved a US$78.4 million loan to help promote sustainable and responsible investments in Ecuador’s mining and energy sectors in order to improve macroeconomic stability, boost productivity, and generate jobs.

The program aims to reduce the energy sector’s emissions and enhance its efficiency and reliability through technical, environmental, legal and economic studies, while ensuring that investments help consolidate the country’s commitments to the implementation of the Paris Agreement, which Quito has ratified.

Ecuador’s mining industry is relatively young and consists mostly of small-scale and artisanal operations. The sector has grown consistently in recent years and it is now expected that investments in mid-sized and large-scale mining will increase dramatically, with new projects leading the industry to account for up to 4 percentage points of the country’s gross domestic product by 2021.

The loan approved by the IDB will finance the strengthening of capacities of planning, regulation, oversight, and implementation of public mining policies, while seeking to minimize their environmental and social impacts. It will also help develop mining and energy planning instruments as well as policy tools to boost up the regulatory framework’s effectiveness and create a business atmosphere that promotes responsible investments.

In addition, the funds will help conduct pre-investment studies for a natural gas regasification plant and for generation facilities –focusing on options that produce fewer greenhouse gas emissions–, plus surface studies to develop Ecuador’s geothermal potential. In order to enhance these investments’ reliability and efficiency, the IDB’s Sustainable Infrastructure Framework will be used as a reference.

The program will also finance research and geological information gathering to support the subsoil resources’ decision-making process and identify opportunities for the exploitation of metal mining resources.

The loan is for a 25-year term, with a six-year grace period and a Libor-based interest rate. The operation will be executed by Ecuador’s Energy and Non-Renewable Natural Resources Ministry together with the Geology and Energy Research Institute.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.