EIB Global Launches €1B Plan to Power Central America’s Clean Energy Future

“The European Investment Bank is the climate bank, and a key player in Latin America and the Caribbean’s energy transition,” said Nadia Calviño, EIB Group President.

At the CELAC-EU Summit in Colombia, the European Investment Bank (EIB), through its international partnerships arm EIB Global, announced a €1 billion financing initiative to boost clean energy, power grid integration, and regional connectivity across Central America.

The new lending program — titled “Electricity Integration of Central America” — will fund transmission and distribution infrastructure, renewable energy generation, and regional interconnection projects in Costa Rica, Panama, Honduras, Guatemala, El Salvador, and Belize.

This major investment, aligned with the EU’s Global Gateway Investment Agenda (GGIA), will advance Central America’s energy transition and decarbonisation goals while ensuring reliable, affordable, and sustainable electricity access for millions of people.

“The European Investment Bank is the climate bank, and a key player in Latin America and the Caribbean’s energy transition,” said Nadia Calviño, EIB Group President. “This financing will deliver cleaner energy, a better connected grid, and a more secure and high-quality supply for millions of people.”

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Powering the Green Transition in Central America

The initiative will serve as a catalyst for sustainable growth and regional integration, reinforcing Central America’s position as a hub for clean energy development. It will consist of five to six sub-operations, each valued between €150 million and €350 million, implemented through framework and investment loans with national utilities and regional energy institutions.

The EIB’s financing will directly support the expansion of the Central American Regional Electricity Market (MER), which enables cross-border electricity trade and grid harmonization among six countries — Panama, Costa Rica, Nicaragua, Honduras, El Salvador, and Guatemala.

The initiative contributes to each participating country’s Nationally Determined Contributions (NDCs) under the Paris Agreement, with an estimated 85% of its funding classified as climate action.

“This investment demonstrates the European Union’s commitment to promoting shared priorities — a green transition and renewable energy cooperation between Europe and Latin America,” said António Costa, President of the European Council.

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A Model for Sustainable Development and Regional Cooperation

EIB Global’s program will strengthen Central America’s electricity integration by modernizing infrastructure and improving resilience against climate-related disruptions. It will also reduce dependence on imported fossil fuels and enable countries to capitalize on their abundant renewable resources, including solar, wind, hydro, and geothermal energy.

“Central America has enormous potential to advance a cleaner and more secure energy future,” said Jozef Síkela, European Commissioner for International Partnerships. “Through this initiative, the EU is supporting a stronger, interconnected electricity system that benefits communities, businesses, and the environment.”

By upgrading power grids, the initiative will:

• Expand renewable generation capacity and reduce carbon emissions.

• Cut energy transmission losses, improving efficiency and stability.

• Facilitate cross-border energy trade, enhancing regional cooperation.

• Increase access to affordable, clean energy for homes and industries.

• Create jobs and economic opportunities in infrastructure and technology sectors.

“This initiative is a clear example of how the EIB works with partners to turn regional cooperation into real progress for people and economies,” said Ioannis Tsakiris, EIB Vice-President. “Investments in stronger power grids and renewables will help Central America move toward a secure, connected, and sustainable energy future.”

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Anchored in the Global Gateway Investment Agenda

The €1 billion initiative forms part of the Latin America and Caribbean pillar of the EU Global Gateway Investment Agenda, which was launched to deepen connectivity, sustainability, and economic partnerships between Europe and Latin America.

The Global Gateway strategy represents Europe’s flagship investment plan for global development, focusing on green infrastructure, digital transformation, education, and health systems. It follows a Team Europe approach, bringing together:

• EU institutions and Member States

• Development finance institutions such as the EIB

• Private sector partners and investors

The approach aims to mobilize large-scale investment while maintaining high social, environmental, and governance standards — a hallmark of EU development cooperation.

“This investment shows Team Europe’s commitment to just, sustainable, and inclusive development in Latin America and the Caribbean,” said Teresa Ribera, Executive Vice-President of the European Commission for a Clean, Just, and Competitive Transition. “Europe brings its added value — high social and environmental standards that define our partnership.”

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Advancing the Central American Regional Electricity Market

The Central American Regional Electricity Market (MER), established in the early 2000s, is one of the most ambitious regional infrastructure initiatives in the Americas. It links the electricity networks of six countries through the Central American Electrical Interconnection System (SIEPAC), promoting trade, reliability, and clean energy transition.

The new EIB initiative will expand upon the MER’s foundation by:

• Integrating renewable energy sources into the grid at scale.

• Upgrading substations, transmission lines, and smart grid systems.

• Encouraging regional cooperation on carbon-neutral policies.

• Building capacity among national utilities for long-term sustainability.

These measures will enable Central American countries to meet rising energy demand, attract foreign investment, and reduce electricity costs for households and businesses.

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A Partnership for the Future

The EIB’s latest engagement builds on decades of collaboration with Latin American governments, contributing to projects in transport, water management, and sustainable energy. Since 1993, the EIB has invested over €13 billion in the region, supporting over 150 projects that promote green growth and climate resilience.

This new initiative deepens the partnership between Europe and Latin America at a time when global energy systems are undergoing a fundamental transformation. It will not only strengthen Central America’s energy independence but also create a platform for European companies to participate in the region’s fast-growing renewable energy market.

“The integration of energy systems is key to facilitating electricity trade and stability,” Ribera added. “By investing in these interconnections, we are investing in prosperity, resilience, and the shared future of our two regions.”

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Empowering a Just and Connected Energy Transition

The EIB’s Electricity Integration of Central America program embodies the shared vision of Team Europe — to build a fair, inclusive, and climate-resilient energy future. By 2030, it aims to ensure that millions of Central Americans gain access to clean, reliable, and affordable energy, supporting both economic development and environmental sustainability.

“In a turbulent world, Europe chooses partnership and progress,” said Síkela. “Together, we are powering communities, protecting the planet, and building a connected, sustainable future for all.”