El Salvador: Complex Outlook for the Electricity Sector

  • Thursday, February 16, 2017
Due to late payments by Salvadoran distributors, generators in Guatemala are reducing sales to the neighboring country and in some cases, suspending them altogether.
As warned by the business sector days ago, the situation in the local electricity market is starting to unravel, as Salvadoran distributors can not meet their obligations to Guatemalan generators due to a delay of of a $53 million payment from the government by way of subsidy.

Prensalibre.com reports that "...Corporación San Diego (formed by a mill, a power generator and a electricity seller) stopped sending 30 megawatts (MW) to El Salvador, last December, said Ottoniel Alfaro, commercial manager of energy. To date they still owed 50% of the invoice issued from the last sale, he added. Also suspended is the sale of another 10 megawatt hours from Costa Rica."

"... On this same topic, the manager of the National Association of generators (ANG), Horacio Fernandez said they know that some generators have decreased the sales volume committed to in their contracts and others are evaluating the risk. However, he said that 'if the situation in El Salvador is not resolved in the immediate future, suspension of the sales contract will be inevitable'. The executive said that they are concerned about the issue, but although is is a particular problem in one country, it affects transactions in the regional electricity market, he added."

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