221
Box 4.1. Contracts with Private Power Generators, 1991-96 At the time of the contract with the Puerto Quetzal Project (PQPC), INDE and EEGSA granted sellers good conditions because of the need to attract investors at a time of crisis and high risk for investment in Guatemala, as well as buyers’ lack of experience in negotiating PPAs. The PQPC contract involved the sale, over a 15-year period, of 110 MW of capacity and associated energy, at an average plant factor of 85 percent. It contained takeor-pay clauses of 50 percent of the above level of energy per month, fuel indexing based on international oil prices, and exemption of all generators from fuel import and distribution taxes. In 1993, Agreement 4-93 was issued, which declared the execution of energy purchase and sale contracts of national interest and social benefit. It empowered INDE to enter into private-generation contracts without meeting the requirements for competitive pricing and a bidding process. The contracts had two important features. The EEGSA PPAs involved cogeneration from sugar mills and thermal plants. With the exception of the Santa Elena thermoelectric plant in Petén, INDE entered into contracts with renewable energy projects. Of the contracts signed, 20 are in effect and represent a current purchase commitment of 518 MW, which will be increased to 609 MW when certain hydropower plants under construction begin operations.
PPAs Contracted before General Electricity Law Entered into Force Buyer EEGSA INDE
No. of Contracts 11 9
Source: ECLAC (2000a).
MW in Operation 462 47.7
Entry into Operation (MW, 2000-2002) 99.2
Life of Contract 2008-2021 2009-2022
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