The World Bank approved this Friday a loan worth 400 million dollars in support of the measures of the Dominican Government, aimed at expand transparency, accountability and efficiency in the energy sector.
In addition to increasing the access to reliable and affordable energyand support the transition to less polluting and low carbon energy sources.
“The Government of the Dominican Republic has taken decisive steps to begin to address the challenges that the country has faced for many decades in the electricity sector. The World Bank will continue to support these eefforts to achieve more reliable electric servicewhich is essential for economic growth, poverty reduction and the well-being of the country’s inhabitants”, said Alexandria Valerio, representative of the World Bank, in a press release.
The Development Policy Loan (PPD) in Support of the Reform of the Electricity Sector for Sustainable Growth, is the second of two operations and will continue to support fundamental regulatory and institutional reforms in the country’s energy sector. The first operation in the series was approved on March 31, 2022.
“Since 2014, the deficit generated by the electricity sector represents between 1% and 2.3% of the country’s gross domestic product (GDP), which is why it constitutes a considerable fiscal burden for the State and an obstacle to green development. , resilient and inclusive. The Dominican Republic depends mainly on imported fossil fuels for electricity generation, which contributes to higher greenhouse gas (GHG) emissions. Likewise, poor and vulnerable households are disproportionately affected by the lack of reliable access to basic electricity services”, says the World Bank in a press release.
The main reforms supported by the second PPD include the creation of effective mechanisms to increase the efficiency of distribution companies; the implementation of strong incentives to expand the integration of renewable energy into the electricity grid; heto decarbonization of the transport sector; promoting the application of energy efficiency measures to reduce GHG emissions, and strengthening the grid code to facilitate more reliable, affordable and resilient electrical services.
In addition, the SGP will support ongoing efforts to improve the financial sustainability of the sector and reduce its tax burden in order to generate significant savings. In this way, the improvement of fiscal space and the efficiency of public spending will be promoted in order to broaden the targeting and coverage of the Bonoluz conditional cash transfers (CTC) and the number of beneficiaries of the Alimentate and Bonogás CCTswith special emphasis on female-headed households, to help reduce poverty and promote social inclusion.