COVID-19 energy roadmap pitches financial boost for CentAm operators

Energy companies in Central America need mechanisms to guarantee liquidity and payments during and after the coronavirus pandemic to maintain the sector’s sustainability.

So reads a just released energy plan drafted by the Central American Integration System (SICA) and the Economic Commission for Latin America and the Caribbean and approved previously by SICA energy ministers.

The roadmap calls on stakeholders to seek near-term support from multilateral development and commercial banks, cooperating countries and cooperation agencies to secure funds and financing to help with sector recovery.

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The proposal envisions the creation of a US$20mn fuel supply fund for the transport of emergency personnel and food and supplies, and the operation of generation units at hospitals, among other uses.

Another fund would provide soft financing to sector companies with payment terms of five to 10 years to help resolve short-term financial imbalances.

“According to preliminary estimates, a fund of the order of US$650mn is required (95% for the electricity subsector and 5% for the hydrocarbon subsector), which would be used for electricity distribution companies (private, public, municipal and cooperatives) and small and medium-sized enterprises (SMEs) that operate in ‘downstream’ activities of the hydrocarbon marketing chain,” highlights the plan.

Other proposed instruments include the creation of a US$100mn revolving fund for domestic and regional power purchases and non-reimbursable funds for US$100mn to help cover unrecoverable losses.

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Photo credit: SICA/CEPAL