The coastal power grid in Central America is ushering in a new expansion momentum. In October 2026, Spanish energy and water utility company Cox officially signed a $2.9 billion infrastructure investment agreement with the Salvadoran government. This is the largest foreign-funded energy and water package project implemented in El Salvador in recent years, directly driving the country's energy transformation process into the fast lane.

The photovoltaic storage project will be implemented first to expand the renewable energy system

The agreement stipulates that within the next three years, Cox will advance energy and water projects covering multiple fields in El Salvador, with a planned maximum of 400MW of photovoltaic installations and 1GWh of battery energy storage systems as the core drivers of energy transformation. The project will collaborate with the El Salvador Lunpa River Hydroelectric Executive Committee CEL to develop two photovoltaic power stations totaling 200MW, which will be gradually expanded to 400MW based on the power grid consumption situation. The initial capacity of the synchronized energy storage system will be 440MWh and 500MWh respectively, and can be expanded to 1000MWh in the future.

The latest disclosed project funding allocation in October 2026 shows that the photovoltaic sector will invest $200 million, the battery energy storage sector will invest $300 million, and the remaining funds will be invested in natural gas infrastructure upgrades and water and sanitation service improvement projects. All project funds will be coordinated through international financial institutions, multilateral organizations, and export credit agencies to complete financing arrangements. By the end of 2025, the total installed capacity of renewable energy in El Salvador has exceeded 1.94GW, including 738MW of photovoltaic installed capacity and 638MW of hydropower installed capacity. After the project is put into operation, the country's photovoltaic installed capacity will directly double or more.

The expansion strategy in Latin America continues to accelerate

This investment in El Salvador is a key milestone for Cox's layout in the Latin American market. Previously, the company had completed multiple important asset layouts in the water and energy sectors in Latin America. In April 2026, Cox completed the acquisition of Iberdrola's Mexico business for $4 billion, directly adding 2.6GW of in operation energy capacity and approximately 12GW of reserve projects, greatly strengthening the regional market operation capability.

Recently, the Kuwait Arab Economic Development Fund also signed a loan of 3 million Kuwaiti dinars to support the construction of an 11MW photovoltaic power station in the San Matias area of El Salvador. The project is scheduled to be officially put into operation in the first half of 2028. Multiple foreign investment projects are being concentrated and implemented in El Salvador, making it an emerging hotspot for renewable energy investment in the Central American region. The coordinated development model of solar and energy storage will also provide stronger support for the stable operation of the country's power grid. Keywords: infrastructure, new energy news

Cox's Latin American energy and water network is continuously extending from Mexico to El Salvador, and this $2.9 billion investment is injecting new capital momentum into the energy transition in Central America.Editor/Cheng Liting