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Central America adopts rules to govern electricity-sharing

June 4, 2013

SAN SALVADOR, El Salvador – On Tuesday, the countries of Central America announced they have put in place rules to govern trade in electricity in the region, following the construction of a 1,790-kilometer network across the isthmus.

The rules took effect on Saturday and are part of the Central American Electricity Inter-Connection System (SIEPAC), said director of regional operations René González, who is from Nicaragua.

“This is a big step toward electricity integration. These are rules that allow us to exploit the SIEPAC system with greater intensity, as well as to boost the capacity to transmit energy between countries,” González said in a press release.

It means the countries of the region are finalizing electricity integration to meet regional demand of 7,500 megawatts, he said.

Market competition will allow governments or private companies to purchase electricity from areas with the lowest rates, as Panama did in early May during an energy crisis prompted by drought.

To help ease Panama’s crisis, El Salvador, Honduras and Nicaragua sold Panama 80 MWH, 24 hours per day, to help alleviate the worst drought Panama has experienced in 15 years.

“Economic actors are guaranteed stability of service [via SIEPAC], and this integration allows the region to become more attractive to foreign investors,” González said.

SIEPAC is a regional energy network that is 98 percent complete. The project received an investment of $494 million, financed mostly by the Inter-American Development Bank and Central American Bank of Economic Integration.

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