IFC Invests $770 Million in ENERGUATE to Boost Power Infrastructure in Guatemala

The financing aims to improve the quality of electricity service, expand access, and refinance existing debt, marking a milestone in the evolution of Guatemala’s capital markets.

The International Finance Corporation (IFC), a member of the World Bank Group, has finalized an innovative $770 million investment in ENERGUATE, Guatemala’s leading electricity distribution company. The financing aims to improve the quality of electricity service, expand access, and refinance existing debt, marking a milestone in the evolution of Guatemala’s capital markets.

The transaction, structured as an A/B Bond, includes a $100 million direct loan from IFC’s own account and $670 million raised through an international bond issuance—a pioneering approach for the country and the largest A/B Bond in IFC’s history. The structure blends IFC’s development finance capabilities with private capital participation, setting a precedent for future infrastructure investments in emerging markets.

“This transaction is a historic opportunity for us to continue creating connections that transform lives in Guatemala,” said Paulo César Parra, General Manager of ENERGUATE. “It will enable us to consolidate a more efficient and reliable service, strengthen confidence in our country, and pave the way for Guatemala to become a regional benchmark in sustainable development and financial innovation.”

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A Historic Financial Innovation

The international bond—arranged by Deutsche Bank Securities, J.P. Morgan, and Santander—matures in 2035 and generated strong market demand, attracting over $3 billion in orders from more than 200 global investors.

The A/B Bond model, traditionally used by IFC in other regions, enables institutional investors to participate alongside IFC under a common credit structure. This not only enhances credit quality but also channels private investment toward development-oriented projects.

“This milestone stands out not only for its size but also for its innovative structure,” said Ivana Fernandes Duarte, IFC’s Regional Manager for Central America. “It will foster the development of capital markets in the country and the region, while strengthening the sustainability of Guatemala’s electricity sector.”

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Powering Growth for 2.5 Million Customers

ENERGUATE serves as Guatemala’s largest power distribution company, covering most of the national territory and providing electricity to 2.5 million customers, including households, businesses, and industrial users. The company’s operations are vital to Guatemala’s economic and social development, particularly in rural areas where access to reliable power remains a challenge.

The new financing will allow ENERGUATE to:

• Upgrade and modernize distribution networks to improve service reliability and efficiency.

• Enhance energy loss control systems, reducing technical and non-technical losses.

• Expand connections to reach more underserved communities, helping bridge the country’s electricity access gap.

• Refinance existing debt, creating financial stability and freeing resources for future investments.

The initiative aligns closely with Guatemala’s national energy strategy and supports Sustainable Development Goal 7 (Affordable and Clean Energy), ensuring universal access to reliable and modern energy services.

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IFC’s Longstanding Partnership with ENERGUATE

The investment builds on a strong partnership between IFC and ENERGUATE. In 2024, IFC extended a $175 million sustainability-linked loan, the first of its kind in Guatemala, tying financial incentives to measurable environmental and social performance targets.

In March 2025, ENERGUATE also became a member of the Future Grids Alliance, a global IFC initiative that brings together electricity utilities from emerging markets to exchange expertise on digitalization, renewable integration, and grid resilience.

Through this partnership, IFC is helping ENERGUATE modernize its network and adopt best practices in energy efficiency, environmental management, and community engagement.

“We are proud to strengthen our strategic alliance with ENERGUATE,” Duarte added. “Our joint efforts are helping the company expand sustainable access to electricity while promoting climate resilience and private sector-led growth.”

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Strengthening Capital Markets in Central America

Beyond energy development, the ENERGUATE transaction is expected to have a catalytic impact on Guatemala’s capital markets. The success of the A/B Bond structure demonstrates the country’s potential to attract international investors through innovative financial instruments that combine development impact with commercial returns.

By mobilizing private capital at scale, IFC helps emerging economies reduce dependency on traditional public financing and build more resilient financial ecosystems. The deal aligns with the World Bank Group’s vision of “maximizing finance for development”, a strategy that leverages public resources to unlock private investment in critical infrastructure.

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A Model for Regional Energy Transition

Guatemala’s power sector has undergone significant transformation over the past decade, with renewable energy sources now accounting for a substantial share of generation. However, distribution networks remain under strain due to rising demand and the need for modernization.

The IFC-ENERGUATE investment will help bridge this infrastructure gap, supporting the development of smart grids and the integration of renewable energy sources into the national distribution system.

The model could also inspire replication across Latin America, particularly in countries seeking to improve energy access while achieving climate goals.

“This financing is not just about improving infrastructure—it’s about building a sustainable energy future for Guatemala and the region,” said Parra. “By working with partners like IFC, we can ensure that innovation and inclusion go hand in hand.”

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A New Era for Sustainable Infrastructure Investment

The ENERGUATE deal showcases the growing role of blended finance and ESG-driven capital markets in accelerating sustainable infrastructure projects. As IFC continues to pioneer investment structures that combine financial innovation with social impact, it reinforces its mission to create opportunities where they are needed most.

With this landmark transaction, Guatemala positions itself as a regional leader in sustainable finance, demonstrating how collaboration between development institutions, the private sector, and international investors can deliver long-term benefits for people, businesses, and the planet.