Climate Alert and Increased Energy Consumption Drive Foreign Investment in Guatemala
To ensure that Guatemala has sufficient energy for the population and the economy, experts believe that investments are needed in both generation plants and transmission lines, as “the transmission networks in the country are highly congested, and these are what make it possible for new generation plants to be installed to bring that energy to cities and populations.”
Currently, around 10% of the population, that is, at least one million Guatemalans, do not have access to electricity. This population is located in remote areas of Huehuetenango, Quiché, and Alta Verapaz. These are areas where it is considered necessary “to install small generation plants in communities or villages that are very far from distribution cable systems and thus be able to meet electrical energy needs with local generation based, for example, on solar panels and batteries or small hydroelectric plants.”
One way to achieve this is through tenders to expand transmission networks. The issue is not only to bid for construction to carry out transmission lines, but there is also a need for state support and flexibility for constructors regarding right-of-way issues. Constructing the lines requires passing through various properties and protected areas, and state support is crucial for this to become a reality.
Additionally, there is a tender for long-term contracts that is part of the Generation Expansion Plan (PEG), known as PEG-5, which is projected to be launched this year with the goal of awarding new generation plants by 2030, as contracts for over 1,065 megawatts will expire in that year. The primary function is to make energy purchases with quality and at the best price conditions for regulated demand, which currently has its energy needs completely covered.
This tender is expected to take place at the end of the third quarter. New projects and some existing plants that can continue to offer are planned. Additionally, around 1,000 to 1,200 MW is mentioned for this tender.
According to experts, having access to electricity is synonymous with development and progress. The goal is to ensure it reaches the entire country. This can be achieved if the generation and transmission tenders are successful.
Paúl Rodríguez
paul.rodriguez@garciabodan.com
Senior Associate
García & Bodán
Guatemala