The Kuwait Fund for Arab Economic Development has signed a KWD 3 million (approximately USD 9.6 million) loan agreement with the Government of El Salvador to finance the development of the San Matías Solar Photovoltaic Plant.
The agreement was signed in San Salvador by Rashid Ali Al-Bader, Acting Director General of the Kuwait Fund, and Gerson Posada Molina, Minister of Finance of El Salvador. The signing was attended by representatives from the governments of Kuwait and El Salvador, including El Salvador’s Deputy Minister of Foreign Affairs Adriana Mira and the Kuwaiti Ambassador to Mexico, assigned to El Salvador, Salah Suleiman Al-Haddad.
11 MW Solar Project to Generate Up to 25 GWh Annually
The San Matías project will involve the development of an approximately 11 MWp utility-scale solar photovoltaic plant at Hacienda San Lorenzo in the San Matías jurisdiction, northwest of San Salvador.
The project will be developed on approximately 108,000 square metres of leased land under a 25-year lease. Around 90% of the site will be allocated to ground-mounted solar PV arrays, while the remaining area will accommodate the substation, parking, access roads and operational buildings.
The facility is expected to generate approximately 20–25 GWh of electricity annually, supporting El Salvador’s growing demand for reliable electricity and increasing the contribution of solar energy to national power generation.
The project will include PV arrays, inverter stations, a containerised step-up substation and grid interconnection infrastructure. It will also incorporate civil works, electrical systems, SCADA and protection systems, engineering consultancy and environmental and social management activities.
The plant will connect to the national electricity grid operated by DELSUR.
Project Expected to Be Completed by 2028
The total project cost, including contingencies, price adjustments, interest during implementation, taxes and fees, is estimated at approximately USD 13.95 million (KWD 4.3 million).
The Kuwait Fund’s KWD 3 million loan will finance approximately 69% of the project cost, while the Government of El Salvador will fund the remaining amount and cover any additional cost increases.
Implementation is expected to take approximately two years, with the project targeted for completion in the first half of 2028.
The loan has a 25-year term, including a grace period of approximately three years. It will be repaid through 44 semi-annual instalments and carries an interest rate of 2.5% per annum, along with a 0.5% charge for administrative and implementation costs.
Supporting Clean Energy and Economic Development
The project is expected to support El Salvador’s economic and social development by increasing domestic electricity generation from solar resources, improving energy security and resilience to climate-related risks, and providing clean energy to industries and communities.
The project is also expected to create employment opportunities and increase government participation in electricity generation, while contributing to several UN Sustainable Development Goals, including affordable and clean energy, decent work and economic growth, sustainable infrastructure, responsible consumption and production, climate action and international partnerships.
The loan represents the first financing provided by the Kuwait Fund to El Salvador, marking a milestone in development cooperation between the two countries.
Separately, the Kuwait Fund has provided El Salvador with a KWD 90,000 grant to finance engineering studies and preliminary designs for flood-control barriers and flow-regulation infrastructure in the Buenos Aires Basin.
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