Energy and Power
Panama’s economy is projected to expand at a rate of 5.6 percent over the coming two years. Energy demand is expected to keep pace at between 4.5 - 5 percent per year. Still, the rise in energy demand must be met by new investment, supply, and infrastructure. With the country’s first natural gas power plant launched in August 2018, Panama is heading in the right direction.
Panama’s efforts to bring natural gas to the nation was finally realized with the successful auction of 350MW in 2015. The bid round attracted 27 companies, with the winner Gas Natural Atlántico - a subsidiary of US-based AES Corporation - to begin supplying the Panamanian market by 2018.
The electricity segment is set to undergo significant expansion in the coming years, with a 700-MW extension of the fossil fuel generation base under way.
Larger LNG vessels are crossing the canal and that has also generated renewed interest. The addition of power through renewables and connectivity to networks in Central America and South America could drive Panama to become an energy hub for export in the region.
- The Panama Canal expansion was completed and opened on June 26, 2016.
- The expansion will allow the Canal to accommodate a higher percentage of the world's liquefied natural gas fleet, greatly shortening the distance U.S. LNG exports must travel and thereby making them more competitive in the Asian market.
- The liquefied natural gas (LNG) tanker Maria Energy completed the milestone transit traveling southbound from the Atlantic to the Pacific Ocean on July 29, 2018. "The steady increase in Neo-Panamax transits reflect our customers' confidence in the Expanded Canal, particularly with our fastest-growing segment," said Panama Canal Administrator, Jorge L. Quijano. "This reaffirms the value and impact our route has had across global maritime trade, including the fast-growing LNG segment."
Panama is the country in the region with the highest investment, with approximately $397 million in energy projects, corresponding to six environmental impact studies submitted to the Ministry of Environment between January and March 2019. Its potential in term of both oil and gas transit and storage through the expanded canal, and generation and exportation of electricity is enormous.
Around 37 hydropower projects in Panama are in design or under construction, according to the Authority of Public Services (ASEP), as part of a push for renewable energy in the country. Of this total, 24 are located in the province of Chiriqui, with a project in Bocas del Toro, 10 in Veraguas, one in Cocle and one in Columbus.
Wind projects actually operating are -
- Nuevo Chagres 1
- Nuevo Chagres 2
- Portobelo Ballestillas
- Rosa de los Vientos 1
- Rosa de los Vientos 2
- Urbalia Panamá, S.A.
A lengthy report highlights the features of the AES Colón project, "which will generate 380 megawatts through three natural gas turbines -one of them steam based- for the country and will provide greater energy efficiency, because 60% of the gas or fuel will produce 100% of the generation of the service." This project has an investment of USD 1 billion and promises to change the country’s energy matrix, and the way energy is generated and distributed in Central America.
There also are other projects like NG Power 700MW gas powered project still in the works.
Solar Power Plants
When it comes to licenses for solar photovoltaic (PV) generation, there are 22 projects in the provinces of Chiriqui, Cocle, Veraguas, Panama, Los Santos and Herrera.
Hydros and Mini Hydros enjoy multiple tax incentives. Solar and wind plants projects are exempt from import taxes, duties, levies and other charges, as well as the tax for transfer of tangible property, among others. For more information, please contact us.
Other investment opportunities that can be explored are:
- New opportunities for hydro and wind power.
- We have a few projects for sale.
If you want to Set up or Acquire Energy projects, The BusinessPanama Group provide a convenient One Stop Shop offering the following services.
We can help you with :
- Setting up or acquiring the business
- Locating office and living premises for the company and its executives
- Forming a company, LLC or branch
- Legal services for setting up all operations, contracts, permits, etc.
- Accessing special tax incentives
- Applying for visas, work and residence permits for expats
- Relocation services
For more information, please contact us. Read more »