Caribbean & Central America - April 2014 (ISSN 1741-4458)

Energy crisis: The recent dispute over the Panama Canal expansion project [RC-14-03] might ultimately have failed to impact on the ruling Cambio Democratico ahead of the 4 May general elections (see sidebar). However, President Ricardo Martinelli has come under fire over another issue with economic implications: his failure to address the country’s energy crisis. On 17 March Martinelli announced energy rationing measures for both the private and public sector (hospitals, schools and other health services have been exempted). This came four days after a fire at the thermoelectric power plant in the La Chorrera municipality, in central Panama, reduced Panama’s domestic energy production capacity by 96 megawatts (MW). Figures cited in the local press put national demand at 1,460MW and capacity at 1,650MW. The rationing measures, which Martinelli said would likely remain in place until the start of the rainy season in late April or early May, are not as drastic as last year. In May 2013 schools and universities were forced to shut for four days and President Martinelli declared a state of emergency in the western provinces of Coclé, Veraguas, Los Santos and Herrera, due to the lack of rain (around 60% of the country’s energy is generated by hydroelectric sources [RC-13-05]). However, the latest measures have reignited calls from the private sector for the government to tackle what it warns is a “time-bomb”. As well as problems caused by the lack of rain, the crisis is attributed to delays in constructing a third transmission line linking Chiriqui province, where most of the hydroelectric plants are located, with Panama province, the main centre of consumption. While planned in 2009 the project was only put to tender and awarded in October 2013 to Brazilian construction company, Odebrecht, for US$233m. Meanwhile on 25 March national daily, La Prensa, cited Fernando Vargas, the head of the environmental management department of Panama’s public services regulator Autoridad Nacional de los Servicios Públicos (Asep), as saying that over the next two years, 13 new hydroelectric projects as well as Panama’s first ever wind farm were projected to come on stream, adding an additional 585MW of energy.

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