The regional development bank said in a statement that the 25-year loan would fuel the construction of a 1,200-kilometer (770-mile) power line linking the "Great North" provinces of Catamarca, Corrientes, Chaco, Formosa, Jujuy, Misiones, Tucuman, Salta and Santiago del Estero.

The vast northern region has 8 million inhabitants, accounting for 20 percent of Argentina's population. The 500-kilowatt transmission line will form part of a strategic plan to boost energy transportation in a region requiring a stronger, more interconnected power grid, the bank said.

The new lines will connect the hydropower electrical generation region of northeast Argentina with the thermal generation regions of northwestern Argentina and improve the system's overall reliability, the bank added. It will also boost integration with power grids in Brazil and Chile, it said.

Authorities have said increasing the power grid's capabilities across northern Argentina will also help meet growing energy demands, while reducing the poverty gap and fostering social and economic development in some of the area's poorest pockets.

The loan has a twenty five-year grace period for repayment at variable interest rates, the bank said.