Limits on Energy Investments?

In Panama, discussion continues over a bill that would modify regulation of the electricity sector, including, among the most controversial changes, setting limits on concessions granted to companies.

Thursday, May 24, 2018

For months, the Trade and Economic Affairs Commission in the Assembly of Panama has been discussing Bill 573, which modifies the regulatory framework for the provision of electricity services.

Among the main changes that are proposed is what is stated in article 19, which establishes restrictions for companies in the sector.  With the proposed change, generation companies that provide public electricity services would be prevented from " ... participating in the Contract Market, when directly or indirectly, or through other generation companies or other means, they have a level contracting that exceeds forty percent (40%) of national power and / or energy consumption."

See "Central America: $1.2 billion in energy projects"

Article 19 adds that there would also be restrictions on companies that " ... Directly or indirectly provide more than twenty-five percent (25%) of the total energy to the Large Clients in Panama's electricity sector."

Regarding the limits proposed in the law reform, Miguel Bolinaga, president of AES Panama, told that " ... beyond changing the rules of the game, which could harm them as a company, there is also an impact on Panamanians because a company that has the possibility of giving the most economic energy is taken out of the market."

See also: "Energy projects in Panama"

In opposition to Bolinaga's proposal, the general manager of the Electric Transmission Company (Etesa), Gilberto Ferrari, said he was in favor " ... of the article, since it is related to setting a limit in order to avoid having an actor that can own a dominant position in the market and not with an investment ceiling."

See bill. (In Spanish)

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In Panama, a bill is being discussed which would modify the legal framework of the electricity sector, and among the proposed changes is setting limits on concessions granted to companies.

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