Central America Faces $250 Million Investment Challenge for Electricity Demand Growth

Central American countries must invest more than 250 million dollars to meet the growth in electricity demand over the next decade, according to a report released Wednesday by the Regional Operating Entity (EOR).

The investment of 198 million dollars would be in 29 “transmission projects” in the period 2024-2033 with the objective of “meeting the growth in demand” and maintaining “in the long term” the operational capacity in local networks of countries for a minimum international exchange of 300 megawatts (MW), according to an EOR statement.

The countries that require the “largest investments” to adapt the national grid are Honduras (41%) and Costa Rica (37%), according to the report by the regional entity based in San Salvador.

In addition, all countries will need to invest 57.6 million dollars in the “expansion” of the regional network they share to reach a transmission capacity of 450 to 550 MW by 2028.

During 2023, Honduras was the country most affected by the electricity deficit, with blackouts of up to six hours in different regions of the country. “The Honduran electrical system is the one that requires the most attention and the greatest effort in transmission investment to obtain the 300 megawatts,” warned the EOR.

On Monday, the Guatemalan government declared a state of energy emergency to guarantee the supply of electricity due to the shortage of rain caused by climate change and the El Niño phenomenon.

It is a “preventive measure that will be in effect until May 31,” but it can be extended if conditions persist, said Guatemalan Minister of Energy and Mines, Víctor Hugo Ventura, in a statement.

Meanwhile, according to the EOR, Panama is emerging in the medium and long term as the largest energy exporter in the electrical interconnection system due to its installation of “natural gas” generation plants. Nicaragua, El Salvador, and Guatemala also have natural gas generation projects.

In 2013, with an investment of almost 500 million dollars, the Central American Electrical Interconnection System (SIEPAC) was completed, which includes 1,793 km of transmission lines from Guatemala to Panama.