Obama Sees Energy as Benefit to Central American Economy

President Obama shakes hands with Costa Rican schoolchildren.
President Obama shakes hands with Costa Rican schoolchildren.

By Phillip Kurata
IIP Staff Writer
Washington,
May 6, 2013

The United States is working with the countries of Central America to develop its energy sector in order to bring down the high price of electricity and bring in investment and jobs.President Obama said in a meeting with business leaders in Costa Rica May 4 that the high cost of electricity in Central America is a burden to businesses and families in the region.

Obama said Costa Rica already is getting 90 percent of its energy from renewable sources, indicating that it already has technology, expertise and a tradition of renewable energy. The president proposed that the United States collaborate in research and technology and form joint ventures to advance renewable energy in Central America.

“If any of us find good answers to renewable energy, that will spread like wildfire and everybody will ultimately benefit,” he said.

Costa Rican President Laura Chinchilla, speaking at a news conference with Obama in San Jose May 3, said energy is “a fundamental issue that undoubtedly is going to define the progress and the joint development not only between the United States of America and Costa Rica, but also between the United States and the Central American region.”

A White House fact sheet released May 4 said the United States supports the creation of the Central American Electrical Interconnection System, which aims to connect Central American electricity grids from Guatemala to Panama.

“Interconnection creates larger markets that can help attract the $25 billion in power-sector investments needed in Central America by 2030,” the fact sheet said. It added that the rich geothermal, solar, wind and hydropower resources of Central America will provide the elements of a diversified, lower-carbon power sector.

In June, the Inter-American Development Bank will host a Central American ministerial meeting in Washington to bring together business people, bankers and senior bureaucrats to launch the interconnection system.

In addition, the U.S. Export-Import Bank and the Overseas Private Investment Corporation are tracking potentially several hundred million dollars in new clean-energy investments in Central America, according to the fact sheet.

Notably, the Export-Import Bank is making a $29 million loan to a Honduran company that will expand wind generation at the Cerro de Hula Wind Farm. The fact sheet added that Ormat Technologies Inc. of Nevada will soon break ground on a 35-megawatt geothermal plant in Honduras. Ormat already operates plants in Guatemala, where it plans to expand its operations, according to the fact sheet.

President Obama said that in addition to creating new electricity generation and transmission capacity, it is just as important to create regulatory regimes that allow integration to take place.

“Given the small size of many Central American countries, it’s critical to create a regional market. And that’s not just transmission lines. It’s also having the rules in place that allow the free flow of energy back and forth,” he said. “Everybody stands to benefit.”

Obama urged the Central American business people to work together to trade and invest more with each other.

“That’s going to strengthen you. That will put you in a more effective position to compete in world markets, and it will allow you, then, to interface with Mexico and the United States and Colombia and other parts of the hemisphere,” he said.