After rescinding Odebrecht's concession to build the Bocas del Toro hydroelectric station, the government has announced that it will reformulate the project for a new tender procedure.
The aim of the Varela administration is to revisit the characteristics of the original project, which consisted of a concession to design, build and operate the hydroelectric plant in Bocas del Toro, formerly known as Chan II.
The government is working on a draft bill to regulate the distribution of energy generated from natural gas in the country.
At a time when investments in power generation projects based on natural gas in Panama and in the region are increasing, the head of the Panamanian Ministry of Energy has confirmed to Laestrella.com.pa that they are preparing the basis for a regulatory framework for the distribution of energy generated from gas.
The government has announced that is planning to resume preliminary exploration activities in the Caribbean by the end of the year.
The National Energy Secretary Victor Urrutia, said that the purpose is to learn more about alleged existing deposits in the area in order to determine if indeed they exist and if there are sufficient amounts to justify extracting them.
More than one hundred and fifty generators expressed interest in participating in the tender for thermal energy, which has been postponed twice and whose date for submission of bids for for the first tranche of 350 MW is 31 August.
The tender has attracted the attention of 158 companies so far, after the date was amended twice.
It is estimated that 100 MW of extra energy a year demanded by Panamanians require an average investment in generation and distribution systems of $400 million a year.
Every year the addition is needed of another 100 MW of power in order to meet the country's growing demand for energy, representing an investment of approximately $400 million a year, according to data from the National Energy Secretariat. Within this framework, employers in the sector have proposed creating long-term policies which provide new strategies for attracting investment.
The Energy Department has announced that it will revise regulations on the market and energy contracts in order to make it more competitive and attract more investment to the sector.
Generating the conditions in the electricity market to encourage more private companies to invest is the aim of the Energy Department, whose chief, Victor Urrutia, said that "... current investments in power generation are insufficient to meet the growth in demand which is expected in the next few years. "
Most of the concessions to build hydroelectric power plants in the rivers of Chiriquí were granted without paying fees, for 50 years.
Sometime later, Mexican tycoon Carlos Slim entered the hydroelectricity market in Panama, offering almost $32 million for two of these concessions. This triggered a “hydroelectric fever”, with the creation of a secondary market between concessionaries and interested businessmen. In those private transactions the state didn’t earn a single cent.
On Friday five hydroelectric projects will be put to tender, four of which were previously taken away from the first developers due to non-compliance and will now be given to the company with the best offer.
The general administrator of the Public Services Authority (ASEP), Victor Urrutia, said that the developers have one year to begin the construction of the projects and will only be granted extensions for another year provided that there is a valid reason. He also said that construction activity must be proven.
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