The European Investment Bank and Naturgy Energy Group have signed a 300 million dollar framework loan to modernize Panama’s electricity distribution networks. This agreement represents the largest loan the EIB has ever provided for a private company project in Central America. The signing ceremony in Panama City brought together senior executives from the European and Spanish financial institutions, Naturgy leadership, and key members of the Panamanian government.
This substantial financial package, equivalent to approximately 260 million euros, is dedicated to supporting the expansion and technological upgrade of power grids operated by Naturgy’s Panamanian distributors, Edemet and Edechi. The project aims to enhance supply reliability, connect new customers including low income households, and facilitate greater integration of renewable energy sources into the national grid. The loan benefits from a guarantee provided by the Spanish Export Credit Agency, Cesce, a crucial element that enabled the deal’s structure.
With this financing, the EIB supports the modernization of Panama’s energy infrastructure, reinforcing regional energy integration. It is an example of how alliances are key to providing citizens with access to cleaner and safer energy, [Translated from Spanish]
EIB President Nadia Calviño stated this during the official signing event. Her presence underscored the strategic importance Europe places on sustainable infrastructure partnerships in Latin America.
A Strategic Partnership for a Modern Grid
The collaboration extends beyond a simple lender-borrower relationship. It embodies the European Union’s broader Global Gateway investment strategy, which seeks to create sustainable development links with partner nations. The guarantee from Cesce was specifically developed jointly by the European Investment Bank and the Spanish agency to support green projects led by Spanish companies outside of Spain. This financial mechanism directly contributes to the climate action and environmental sustainability objectives the EU promotes both within and beyond its borders.
Francisco Reynés, executive president of the Naturgy Energy Group, emphasized the loan’s significance for the company’s long term commitment to Panama. He explained that this credit will reinforce Naturgy’s investments in the country and reflects their dedication to a permanent presence there. The new investments in Panama’s electrical grid will help improve service quality for customers, enhance supply security, and promote a more efficient, secure, and sustainable energy model.
The high level attendance at the signing ceremony highlighted its diplomatic and economic weight. Participants included the EU Ambassador to Panama, Isabela Matusz, and the Spanish Ambassador to Panama, Guzmán Palacios Fernández. The Panamanian government sent a strong delegation featuring Minister of Economy and Finance Felipe Chapman, Minister of the Presidency Juan Carlos Orillac, and Minister of Commerce and Industry Julio Moltó, among other senior officials and the mayor of Panama City.
Tangible Benefits for Panama’s Energy Future
This investment program is designed to produce concrete improvements for Panama’s energy sector. The initiative will comprehensively expand and modernize distribution networks across the nation. A primary goal involves reducing both technical and commercial energy losses while simultaneously increasing the overall capacity and resilience of the electrical system. This enhanced robustness is critical for weathering extreme weather events and meeting growing consumer demand.
The project will also actively facilitate the connection of new users to the grid. It specifically aims to bring service to underserved communities, including low income households, thereby advancing energy equity. Furthermore, the upgraded infrastructure is engineered to support much higher levels of renewable energy integration, with a particular focus on accommodating solar power. This is a pivotal step for a country seeking to leverage its natural resources for a cleaner energy matrix.
This credit reinforces Naturgy’s investments in Panama, and reflects our commitment and vocation of permanence in the country. The new investments in Panama’s electrical network will help improve the quality of service to our clients, the security of supply and to promote a more efficient, secure and sustainable energy model, [Translated from Spanish]
Naturgy Executive President Francisco Reynés made this statement, outlining the expected outcomes for end users. By improving operational efficiency and network reliability, the project is anticipated to contribute to lower electricity costs over time and significantly bolster national energy security. These benefits will be particularly impactful for the most vulnerable communities, for whom energy affordability is a major concern.
Aligning with Global Climate and Development Goals
The 300 million dollar loan agreement contributes significantly to the climate action objectives embedded in the EIB Group’s Strategic Roadmap for 2024 2027. It also aligns with the second phase of the Bank’s Climate Bank Roadmap covering the period from 2026 to 2030. The investment will support long term energy security, foster economic growth, and aid in climate change mitigation within Panama. It simultaneously promotes European involvement in Latin America’s sustainable energy transition, a key pillar of international cooperation.
EIB Vice President Ioannis Tsakiris framed the project within the larger context of Europe’s partnership with the region. He described the collaboration with Naturgy and Cesce as a reflection of the EIB’s role as a catalyst for sustainable investments that connect Europe and Latin America. The project will modernize the Panamanian electrical system and facilitate access to cleaner, more efficient, and more affordable energy for thousands of homes and businesses. Tsakiris identified it as a clear example of how the Team Europe approach and the Global Gateway initiative generate real impact in people’s lives while contributing to a more sustainable and resilient energy future.
This operation forms a core part of the European Union’s Global Gateway investment agenda in Latin America and the Caribbean. It falls under the flagship initiative designed to strengthen the Central American Regional Electricity Market. The project directly contributes to Panama fulfilling its Nationally Determined Contribution under the Paris Agreement. It does so by enabling the integration of new renewable energy capacity and improving the overall efficiency of the national power system. This focus on cross border energy integration is a growing priority for regional development, as seen in broader discussions across Latin America.
Pablo de Ramón Laca, the executive president of Cesce, highlighted the leadership of Spanish companies in executing projects relevant to Panama’s economic development. He also stressed the importance of the agreement with the EIB, noting that it expands Cesce’s capacity to support and back the internationalization of Spanish companies. This deal exemplifies the critical role the EIB plays as a financial partner for European businesses expanding their investments in sustainable infrastructure across Latin America. The bank has recently emphasized this strategic focus at high level forums, including the recent EU CELAC summit, signaling a continued commitment to the region’s development.