Electrical Integration of Central America

There is a Central American power line and treaty financed by the World Bank and the Inter American Development Bank. This line of power transmission  begins in the Sub-station of Valadero in Panama and finalizes in the Sub-station El Cajon in Honduras and complies a total of 15 sub-stations.

Among the works that will be completed are 802 kilometers of 230 kV. lines from Panama to Guatemala, connections to transformer substations in each country, and a regional coordination and transaction center. At the same time, the different countries supporting the project will carry out works to upgrade their national grids, making the entire regional system more reliable and economical.

The first phase of the project, would be finalized in the 2003 and would have a capacity of transmission of 300 MW. The second phase would duplicate the capacity of the line by adding a second circuit of 230 Kv, which expects to be in service by 2008.

The present value of the savings that would provide the project for the six countries of the America Central would be of US$513.700.000 (utilizing an interest of the 12%) during the 30 years of life estimated of the project.

The IDB financing includes a $170,610,000 loan for works to Empresa Propietaria de la Red, S.A. (EPR), a mixed capital company with a majority public sector interest. A second loan of $9.9 million and a grant of $1.5 million will finance technical cooperation to assist the Counsel for the Electrification of Central America (CEAC) in establishing the appropriate legal, institutional, and technical mechanisms to promote private sector participation, particularly in the development of additional generating capacity.

This integration was created to satisfy the needs of Central American countries with less capacity than demand. The idea is that countries with excess power can sell it to other countries in the area.

Among the plans of the Government is the extension of this line to include Mexico and Colombia and the possibility to sell electricity to these countries.

Mexico is already a close trade partner of Costa Rica because of the "Costa Rica-Mexico Free Trade Agreement" and Colombia is already connected with Panama, making these goals reachable in the very near future.

More information on this subject can be found through the Counsel for the Electrification of Central America (CEAC).

The CEAC is an agency regional of cooperation, coordination, and integration, whose main purpose is to achieve the best use of the energy resources of the member states through an efficient, rational, and appropriate generation, transmission and distribution of the electric energy to the countries of Central America.

The Central American country signatories of the Covenant Constituent are represented in the Counsel by their public institutions dedicated to the generation, transmission, and electric generation of energy.

The generation of energy in Central America is mainly generated through oil burning, followed by Hydro and alternative sources are very scarce. The spirit of this law is to generate energy through non-conventional resources.

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