The liberalization of Costa Rica’s electricity sector would strengthen rural power cooperatives and encourage private producers, Eduardo Zúñiga, from Central American law firm Arias & Muñoz, told BNamericas.

The executive recently submitted a bill to the national assembly that would create a new power sector framework law to open up the sector to competition. State telecoms and energy monopoly ICE is currently the only agent authorized to purchase and export power.

The opening of the market will strengthen the cooperatives because today although these have concession contracts with the government to distribute in determined geographic areas, they have begun to look for external financing for millions of US dollars for their own hydroelectric projects, said Zúñiga.

One of the problems faced by cooperatives in securing financing is that they are considered part of ICE, which has high leverage levels with local banks and therefore cooperatives have been denied financing, he added.

According to the lawyer, it is profitable to lend to cooperatives because their financials are in order, and they have assets and land.

The cooperatives are Coopelesca, Coopesantos, Coopeguanacaste and Coopealfaroruíz.

Arias & Muñoz’s 23 practice areas include energy law, government procurement, foreign investment, public infrastructure and PPPs, and utilities.

The entire interview with Zúñiga will appear in this week’s issue of Perspectives, for subscribers only.

Similar Posts:

Share