El Salvador expects over $3 billion in energy sector investments

Photo of author

By LatAm Reports Staff Writers

The government said 99 per cent of electricity generation is expected to come from renewable sources by 2030.

The Salvadoran Association of Industrialists (ASI) said Wednesday that for the next few years the government expects investment in the energy sector to exceed $3 billion.

The union cited an interview given to Forbes by the head of the Directorate General of Energy, Hydrocarbons and Mines (DGEHM), Daniel Álvarez, who said that the radar contemplates the construction of two geothermal and wind farms, as well as a natural gas plant in Acajutla and oil exploration.

Jorge Arriaza, president of ASI, said that in the region large investment packages are also being prepared in the energy sector, as in Costa Rica where more than $4 billion has been announced to match demand.

“In the past I don’t have an exact fact, but in the end there have been much higher investments than that $3 billion), but the important thing is to focus what’s coming,” said Arriaza during the first day of the Regional Energy Congress (COREN).

The spokesman for the ISA said that the increase in demand in the future is “considerable,” so it is necessary to plan. The problem with energy is that it is needed in the moment, but the planning or construction of the projects takes time, you have to go a lot tied up,” he added.

Industrialists say it is “new,” the Executive’s initiative to explore the generation of nuclear power, a technology that is considered clean but not renewable.
Renewable energy

The ISA also approved the creation of a publicly funded wind farm. The president of the trade union said that the project was disclosed with the guild more than a year ago and will provide energy, although to a lesser extent than other injections such as hydroelectric ones.

On the energy issue El Salvador is positioning itself very well. In Costa Rica there was a concern that rationing could arrive three or four months ago. El Salvador doesn’t have that problem, Arriaza added.

The association expects that by the end of 2024 the energy sector will grow by 10 per cent while the manufacturing industry as a general rate of 1 per cent, which they consider very positive after starting a contraction from the second quarter of 2022.

The ASI’s Energy Manager, Javier González, said that El Salvador is among the countries that maintain more than 70 percent of its energy matrix linked to renewable sources. The trade union recalled that 40 percent of the energy generated in the country comes from hydroelectric plants.

The executive director of the El Salvador Regional Operator Authority, René González, said during a presentation that the region has managed to diversify the energy source by reducing the use of fossil fuels, with less oil and more renewable sources.

Gonzalez said that in the following years natural gas will be having an important presence in the region.