Central American Electricity Integration: Central American Electrical Interconnection System

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Apr 2017
In 2016, it was twenty years since the signing of the Central American Electricity Market Framework Treaty (1996) by the Presidents of the six nations of the Central American Isthmus. It was also the celebration of the forty years since the beginning of operation of the first electrical interconnection between Honduras and Nicaragua in 1976. For this reason, the Inter-American Development Bank (IDB) developed this publication that aims to present, in an integrated and coherent manner, the Central American electricity interconnection process since its inception, its achievements and benefits to date towards higher levels of integration. The publication provides evidence of the economic convenience of regional electricity integration, highlighting the efforts made to achieve equity and symmetry in the process with respect to the participating countries and their agents, both public and private. The economic evaluation of different levels of electricity integration in Central America is examined, complemented by the analysis of the institutional and political viability of implementing those levels of integration, studying the benefits and costs and the different types of barriers that can hinder progression and consolidation of such process.