U.S. Agency for International Development
Central American Bank for Economic Integration
U.S. Department of Energy
U.S. Trade and Development Agency

CONTEXT
As a region, Central America has the unique opportunity to take full advantage of the economic opportunities presented by the DR-CAFTA trade agreement. However, to make this a reality, the region must overcome the common challenges that affect its competitiveness, the availability of reliable power.  Fundamentally, greater emphasis must be placed on the development of an integrated power market.

While there are efforts such as the SIEPAC regional transmission infrastructure project, the Central American energy sector is confronted with numerous obstacles which prevent private investment in the industry to meet growing demands.  There continues to be broad-based regulatory uncertainty and in some cases regulatory voids. Some national frameworks are not yet fully compatible with the efforts to promote a Central American regional electricity market. There are also too many pricing disputes and theft incidents that lead to rolling blackouts. This situation is further compounded by high global fuel prices. The Central American Energy and Competitiveness Conference is designed to target these weaknesses and secure a commitment by decision-makers to undertake critical “next steps” to create a more favorable investment climate that is predictable, transparent and market-friendly.

CONFERENCE OBJECTIVES
This Conference will encourage dialogue between the public and private sector stakeholders involved in power generation, transmission and generation. This will include government regulators and policy makers, energy providers, the investment community and customers.  The emphasis will be on developing strategies for developing regional regulatory and infrastructure integration, policy harmonization, improved investment climates and encouragement of energy diversification into renewables and conservation. The goals of this Conference is to encourage decision makers and business leaders  to agree upon realistic recommendations and “next steps” that will positively improve the regulatory climate and encourage investments which would ultimately strengthen and diversify the power generation sources and reduce energy costs. The dialogue will be framed to ensure that recommendations will be congruent with the context of the DR-CAFTA in order to maximize the trade benefits of the agreement.

This Central American Energy and Competitiveness Conference will aim to engage leaders from industry and government including entrepreneurs and small and medium enterprises; foster interactive dialogue between top level executives; build capacity and disseminate information on energy regulation and investment opportunities and financing; identify best practices in regulation structure and management; forge partnerships between the public and private sector inter-regionally and extra-regionally; find equitable solutions between energy suppliers, generators and consumers; generate recommendations that will deliver results to the Central American community, and encourage commitment from decision makers to implement and act on recommendations.

TARGET AUDIENCE
Government officials, regulators, investors, private sector executives, business and industry, regulatory specialists, financial institutions, and business associations from the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua; as well as the U.S. public and private sector executives involved in the energy and investment sectors who are seeking to do business in Central America.

CONFERENCE METHODOLOGY
The conference will kick-off with a Town Hall style  meeting that will include introduction of a “White Paper” funded by USTDA.  This paper will provide a country-by-country synopsis of each country’s current regulatory framework in each country, installed capacity, power sector players, and tariff structure. The White Paper highlights the key challenges to the region and will propose thought provoking questions to be considered during each of the conference sessions. 

Break out sessions will allow regional and U.S. leaders to present their perspectives and vision for a future that has reduced regulatory bottlenecks and an improved investment climate for power generation and distribution.

The fundamental question to be answered at this Conference is:   What type of national and regional regulatory frameworks should be implemented to optimize and encourage investment in energy?  The Moderator will pose critical questions to be answered relevant to the theme.  Comments and suggestions from the ensuing discussion will be summarized into 3-5 actionable responses.

At the conclusion of the conference, a report will be compiled by USTDA, presenting the findings of each Focus Area session.  This in the form of an  Action Plan that reflects the input of all stakeholders.

FOCUS AREAS
Regulation of Power Generation and Supply
In order to remain competitive the region must move to integrate its essential infrastructure in a compatible and cohesive manner. Central to this effort is the integration of regional energy and power generation systems. Achieving this however calls for harmonized regulatory regimes and adoption of regional best practices. What measures need to be implemented to create market efficiencies and to render long-term benefits to the region? What steps can governments take to encourage investment sufficient to meet increasing demand for new power generation? Is regional regulatory harmonization economically feasible? What innovative policy solutions and legal standards should the region adopt to meet these energy challenges?

Energy and Competitiveness
While the efficiency of the region’s utilization of traditional imported petroleum supply must be managed and optimized to lower end user costs, enhanced energy security can be realized by diversifying the energy portfolio. How can countries and the region optimize this potential? What regulatory frameworks need to be in place to encourage the integration of new energy resources into generation and transmission systems? Which renewable energy sources hold the most potential for the region? Are these sources technical and financially feasibility? Are policies in place to create incentives for investment and entrepreneurship in this sector?

Regulatory Practices which Encourage Investment
The deficiencies in the energy and power generation infrastructure throughout the region require the inflow of foreign and local investment. To make investment attractive there must be more than just “dialogue” between the public and private sectors to provide investors with confidence in the market. What do international and multilateral lenders and investors take into account in making investment decisions? How can governments ensure the operating environment is attractive?

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