The Electricity Market in El Salvador

The risks of a system affected by political interference and regulation uncertainty.

Wednesday, August 19, 2009

Fitch has published a special report on El Salvador's electricity market, its risks and the challenges to be faced by the new government, whose cabinet took office on June 1st.

In the last few years, El Salvador's electricity market has been marked by political interference and regulation uncertainty. This was visible in violations of the legal framework, freezing of rates and granting subsidies, measures that have affected financial performance and increased the risk of companies participating in the sector, in addition to shrinking the country's public finances.

More on this topic

Salvadoran Electricity Sector

October 2015

Salvadoran authorities outlined investment opportunities in the sector, announced a 150W tender and detailed the inner workings of the electricity market in the country.

INTRODUCTION

The electricity sector in El Salvador is characterized by an electricity market in which public and private investors are able to compete with clear and transparent rules.

Lack of Regulation Prevents Power Purchase (3)

April 2014

Paying lip service: For the third consecutive year the news is the same, there are still no definitions of the regulations for the Electrical Interconnection System for Central American Countries.

The electricity purchase that AES El Salvador has agreed with Hydro-Xacbal of Guatemala remains elusive.

Regional Electricity Market Regulations

August 2010

New investment opportunities open up with the coming into force in November of the regional regulations for the sale and purchase of electrical power.

EOR's executive director, René González, indicated during the third Regional Electricity Market Convention in San Salvador that, "we are now moving from the transitional phase into the main stage in the project, from a regulatory point of view, which will enable greater integration," according to an article published on 7dias.com.do.

El Salvador’s Electricity Sector

September 2009

Fitch Special Report: Industry Risks and Challenges for the New Government.

Overview
El Salvador’s electricity sector exposure to government intervention and regulatory uncertainty during recent years has affected the financial performance of the companies in the sector. The impact of government intervention has been somewhat mitigated by recent measures taken by the current administration to eliminate energy

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