In Costa Rica, the state power company will have to pay $112 million to the contractor of the Chucás hydroelectric project, for "additional expenses that it authorized and then refused to recognize."
In the ruling issued by the International Center for Conciliation and Arbitration (CICA), to which the company Enel Green Power Costa Rica appealed to resolve a conflict that originated in 2015 due to an almost $148 millionincrease in the Chucás hydroelectric project, which has not yet been completed, it was established that Instituto Costarricense de Electricidad (ICE) acted with "bad contractual faith".
The Italian company in charge of the 50 MW hydroelectric station Chucás has appealed the fine of $4.6 million imposed due to delays in the construction of the plant.
The hydroelectric project, which is being built in the format of Build, Operate and Transfer (BOT) in Atenas in Alajuela, has been delayed due to "external causes such as landslides caused by geological problems and flooding", explained the company to Crhoy.com .
Latin America is one of the most promising renewable energy markets for Enel Green Power, which plans to invest more than 2 billion Euros by 2016 for the development of renewable energy in the region.
Latin America is a rapidly expanding market, where it is expected that energy demand will have an average annual growth of 3.5% by 2020.
To meet this growing demand, "renewables will play an important role and we have about 830 MW of renewable capacity in operation, capable of producing over 3.4 million kilowatt hours of energy with zero emissions," said Enel Green Power (EGP)’s area manager for Iberia and Latin America Maurizio Bezzeccheri in a recent interview.
An editorial in Nacion.com describes the limitation imposed by the law on the investment of private capital in electricity generation as "a cap on development" .
Private companies are not allowed to build plants of over 50 MW of capacity. When an investment is made with a view to exploiting the plant for its entire lifetime, without a transfer to state power company ICE, the limit drops to 20 MW.
Enel Green Power says there is room to diversify sources of energy in Central America .
Representatives of the company, which has presence in Brazil, Mexico and Chile, have shown interested in developing geothermal projects in Guatemala, where they are diversifying the development of energy sources.
Legal stability, foreign investment protection and a business friendly environment are the elements that companies such as Enel are looking for in order to bring their business to Central America.
Enel Green Power announced the start of construction of a new hydroelectric power plant between Alajuela and San José.
The new plant, called Chucas, would have an installed capacity of 50 MW and once operational it will generate about 219 million kWh/year, the equivalent annual consumption of over 81 thousand homes.
Enel Green Power, owned by Enel Group which focuses on renewable energy, hopes to complete the plant by mid-2013, increasing their installed capacity in Costa Rica to 105 MW.
Costa Rica-based Grupo Saret aims to become one of the leading players in electricity generation in Central America.
Saret aims to seek a partner with experience in the industry so it can compete with companies such as Enel of Italy and Spain's Unión Fenosa.
Already it has plans to build several plants in southern Costa Rica, as well as in northern Panama and Nicaragua.