Dr Nick Rischbeith, Executive President, Central American Bank for

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Energy and Clean Energy in
Central America
Investment Opportunities within the Region
Dr. Nick Rischbieth
Executive President
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9,033,399 users
12,453 MW installed capacity
5% increase per year during the past 5
years in installed capacity
3.0 % energy consumption increase
per year during the past 5 years
5,683,726 inhabitants without
electricity (Guatemala, Honduras and
Nicaragua accounting for 85 % of the
total).
In 2012, 64.6 % of the Energy injected
to the National Grids came from
Renewable Energy (RE) sources.
In 2012, 540 MW were added within
the region, all coming from RE
sources. This trend is expected to
remain constant in line with market
and environmental considerations.
• New power capacity added to the National Interconnected Grids
during the last years, predominantly from RE sources (+90%).
• Incentive laws in each and every country to promote RE investment
for power generation purposes.
• Long term Power Purchase Agreements, 15+ years to ensure financial
returns for investors.
• Acceptance of distribution companies or energy government agencies
of renewable energy during operation (avoiding intermittence issue)
• Regional infrastructure that allows energy transactions within the
whole region. Just recently the Central American Electrical Integration
System (SIEPAC) has been put into operation.
According to a 2009 study, geothermal potential for power generation in Central
America is estimated to be of 3,900 MW and more than 50 sites have been identified
for eventual development
Costa Rica
Potential
(MW)
900
Identified
Sites
10
Installed
Capacity (MW)
218
El Salvador
700
13
204
Guatemala
1,000
13
49
Honduras
100
7
-
Nicaragua
1,200
10
165
Panamá
N/A
5
-
Total C.A.
3,900.00
58
636
Country
Source: LaGeo and CEPAL
Only 16% of
the potential
is being
exploited
Country
Potential
(MW)
Installed Capacity
(MW)
Costa Rica
5,802
1,700
El Salvador
2,165
487
Guatemala
5,000
986
Honduras
5,000
538
Nicaragua
1,760
105
Panamá
2,341
1,479
Total C.A.
22,068
5,295
Source: CEPAL
Only 24% of the potential is being exploited
Country
Good to
Installed
Excellent
Capacity (MW)
Potential (MW)
Costa Rica
2,880
148
El Salvador
6,880
-
Guatemala
7,840
-
Honduras
10,860
102
Nicaragua
38,065
146
Panamá
N/A
-
TOTAL
66,525
396
Source: Swera and CEPAL
Only 0.6% of the potential is being
exploited
During the dry season wind power
provides up to 35% of
electricity in Nicaragua
 C.A. as a whole has an
average radiation that
ranges from 1,440 (4
hours per day) to
2,340 (6.5 hours per
day) during peak
hours.
 Radiation of at least 4
peak hours per day is
considered a
profitable investment
when bearing in mind
the electricity costs in
the region.
8%
35%
36%
40%
56%
58%
Non-renewable
Energy
92%
65%
64%
60%
44%
Guatemala El Salvador
Source: CEPAL
Honduras
Renewable
Energy
42%
Nicaragua
Costa Rica
Panama
Public Installed Capacity MW
Private Installed Capacity MW
6,840.80
7,429.50
7,995.30
6,298.10
6,819.00
3,925.40
3,887.60
4,364.60
4,493.10
4,452.50
2008
2009
2010
2011
2012
Source: CEPAL


Development Bank founded on December 13, 1960 with
the objective of promoting the economic integration and
balanced economic and social development of its founding
countries.
Dominican
Republic
Mexico
Currently the Bank has 13 members, as follows:
•
•
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Five Founding Members:
– Costa Rica
– El Salvador
– Guatemala
– Honduras
– Nicaragua
Colombia
Spain
Founding Members
Non-Founding Members
Beneficiary Country
Two Non-Founding Regional Members:
– Panama(*)
– Dominican Republic(*)
Guatemala
Guatemala
Belize
Belize
ROC (Taiwan)
Honduras
Honduras
Nicaragua
Nicaragua
El
El Salvador
Salvador
Five Non-Regional Members:
– Republic of China (Taiwan), Mexico,
Argentina(*), Colombia(*) and Spain
Argentina
Costa
Costa Rica
Rica
Panama
•
One Beneficiary Country:
– Belize
(*) These countries are also benificiary countries.
In 53 years of history, CABEI has been the main promoter of
development in the Central American region:
• The Bank has financed more than 2,800 operations in the sectors
of road infrastructure, energy, healthcare, education, water and
sanitation, MSME, agriculture and rural development, housing,
industry and tourism.
• CABEI has expanded its field of action to include Belize, Panama,
Dominican Republic, Colombia and Argentina as beneficiary
countries.
• In 2009, CABEI increased its authorized capital from US$2.0 billion
to US$5.0 billion in order to attend the region’s increasing need
for financing. To that end, it developed a new strategy for the
2010-2014 period.
Factors Supporting the Ratings:

Sustained growth

Diversified fund procurement


Sound asset quality
High liquidity



Strong capitalization
Conservative financial
policies / strict credit
policies

Continued support from
international community
Demonstrated shareholder
support

Multilateral / preferred
creditor status
CABEI ‘s Long-Term Ratings History (2002 – 2013 )
14
CABEI´S ROLE in ENERGY:
1. Productive
Infrastructure
“To Provide
financial
solutions to
promote energy
efficiency,
boosting the
development of
energy sources
in Central
America”
6. Industry, Urban
Development and
Services for
Competitiveness
2. Energy
5. Human
Development
and Social
Infrastructure
3. Financial
Intermediation
and
Development
Finance
4. Agriculture
and Rural
Development
Power generation with renewable sources
Biofuels from sources that do not jeopardize food security
Transmission and Distribution projects including rural
electrification
Energy Efficiency
Projects that improve the Structure, Diversity and Efficiency
of the countries Energy Matrix
Power generation from Non-renewable Energy sources,
essential for Governments (E.g. Emergencies, unexpected
meteorological conditions, etc.)
More than 170
projects with a
total investment
of more than
US$2.9 billion)
64% Renewable
19% Energy
Infrastructure
(SIEPAC)
Approximately
4,505 MW
Equivalent to 36%
of the installed
capacity in the
Central American
region
More than 30
million tons of
reduction in
greenhouse gases
Public sector 72%
Private sector 28%
Hydropower
Palomino HP in
Dominican Republic
Geothermal
Pailas Geothermal Plant in
Costa Rica
Xacbal HP in Guatemala
Solar Power
Solar Plants to be built
in El Salvador and Honduras
Wind Power
Wind Farm Amayo
in Nicaragua
Wind Farm Cerro
de Hula in Honduras
• Pre-investment
and Grants
• Direct
Investment
(Direct Loans,
Co-financing,
Syndicated
Loans, BLT´s)
Programs and Products
Financial Schemes
Sectors
• Public
• Private
• Financial
• Energy
Efficiency
• Renewable
Energy
• Energy
Infrastructure
Net Approvals per Sector
(percentages)
1.7
0.6
5.4
19.0
35.4
23.4
6.1
8.4
General Dist.
Biomass
Hydraulic
Wind
Geothermal
Thermal
Transmission Lines
Hydrocarbon
20
• CABEI expects to approve US$360 MM during
2014 in the Energy sector (25% of the Bank´s
investment portfolio).
• Projects to be funded during 2014: Wind
Power, Hydro, Geothermal and Private
investments (mainly in Honduras) due to the
Deregulation of the Transmission and
Distribution lines.
• Stronger links with National Goverments, other Multilaterals (IADB, WB, CAF)
and Bilateral Financial Institutions (KFW) will lead to new projects, such as:
(a) Joint Geothermal Development Facilities to boost investment within
this renewable energy source.
(b) Distribution Generated Energy with help of solar technology and a
considerable increase in solar energy interconnected to National Grids
capable of supplying neighbouring countries through existing
infraestructure.
(c) New power additions from Wind Power throughout the region.
(d) Introduction of Natural Gas as a cleaner and more efficient source of
Energy, displacing Bunker fuel.
• CABEI is committed to financing RE energy projects and maintaining its
position as main financial provider of the Central American region.
• CABEI will maintain its support to national and regional interventions such as
those identified within the Central American Integration System and
Mesoamerica Project.
• New power generation will come, most likely, from RE investments due to
market and environmental considerations.
• Every single country in the region has opened the power generation sector to
private investors.
• Deregulated Energy Markets in Guatemala, El Salvador, Nicaragua and
Panama, will allow investments in power generation, distribution and high
voltage transmission (only GUA and ES allow private investments in high
voltage).
• Honduras is currently deregulating its Energy sector with a clear decision to
allow investments in Transmission and Distribution (currently only the power
generation sector is open to private investments).
• The introduction of RE will need investment from distribution/energy related
companies in order to cope with the intermittence issue of these
technologies.
• US$1.5 billion per year will be required to fulfill energy investment needs in
the region.
Thank you
Central American Bank for Economic Integration

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