Panama gas project draws call for greater transparency

The Panamanian government’s announcement of a new natural gas-fired power generation project has raised concerns from local business executive association APEDE. 

The Gatún project was part of the power sector development plan which President Laurentino Cortizo Cohen unveiled on Tuesday. The government will hold a 25% interest in the planned US$1bn undertaking, InterEnergy Group 51% and AES 24%.

Read Panama President announces launch of the Plan for the Comprehensive Development of the Electricity Sector and InterEnergy Group Invests in a megaproject that will provide 670MW of capacity to Panama’s electricity matrix

Weeks ago, BNamericas reported that the environment ministry had accepted for review an environmental impact study for the 670MW project. 

Although APEDE applauded the plan, the association said that Gatún could infringe on the institutional framework and transparency of power sector contracting processes. 

“APEDE calls on the national government to carry out the concession award processes with total transparency, in compliance with the laws and regulatory standards that apply to this activity, which also guarantee the country a better energy price,” it said in a statement.

“We have calculated that significant reductions in the final price could be established if the review is carried out with transparency, clear rules and adjusted to the prices and market conditions of 2021, since the price of liquefied natural gas has fallen,” the association added.

A similar call was issued by Panama’s industry group SIP, which asked authorities to ensure that the sector roadmap consider all stakeholders 

“The success of the implementation of this plan for energy development will depend, in first place, on wide communication that includes the final consumer and the various sectors of the economy; the strengthening of the institutional framework of the energy sector, the exploration of new forms of renewable energy generation and a greater participation of other companies present in the Panamanian market,” said SIP. 

Regarding Gatún, SIP stated that it supports all investment that results in economic reactivation. 

This is not the first time this year that Panama’s energy authorities have under scrutiny from local stakeholders. 

Trade, industry and agriculture chamber CCIAP has criticized the “lack of clarity” in the power market, and the hydroelectric generators chamber has pointed to alleged shortfalls related to gas-fired power production.

Also read Panama private sector pitches energy proposals as part of US$4bn plan

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