Energy Sector Loses Competitiveness

According to entrepreneurs dedicated to the distribution of electricity in El Salvador, the rigid legal regulations prevent progress being made on issues such as the development of distribution networks and improvements to the quality of service.

Monday, July 30, 2018

Representatives from the Association of Distributors of Salvadoran Electric Power (Asdees), believe that due to the gap between technological advances and the backlog of the regulatory framework for the sector, the country is losing competitiveness.

A spokesperson for the Asdees, Leonel Bolaños, told Elsalvador.com that " ... while technology is advancing rapidly and electrical devices are being manufactured with increasingly greater sensitivity, in El Salvador, quality standards, for example, have been the same for the last two decades and they have not changed 'because the inertia of State entities is slow and there is no one who is bothered with promoting change'."

See: "Electric transformers: Market figures in 2017"

Regarding the bureaucracy that companies in the sector have to deal with, Bolaños details that " ...For small distribution companies, the cumbersome procedures and the antiquity of the regulations have also become stumbling blocks causing the electricity market to not 'work as the law says it should work'."

See also: "Electric cables market in Central America"

For his part, energy manager at the Salvadoran Association of Industrialists, Juan Ceavega, said that " ... the problem is not the lack of intention to create new companies, but rather "it is a very expensive and high risk process" and due to its complexity, it requires more effort. 'What happens is that it is not so easy for these companies to arise.  It requires a large investment and besides people don't say I want to set up here and right now; they have to look at the permissions for the poles, the rights of way. It's not so simple, it's not like setting up a new store or shop. You can not be a distributor if you are not regulated.'"

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