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related energy regulations for the six countries of the region. Nicaragua is the only country in the region that has a specific geothermal law. However, all of the countries have regulations (such as decrees) that affect the development of geothermal resources. The institutional capacity and knowledge on geothermal development largely reside in the state-owned or private companies involved and is generally weak or non-existent at the ministerial level. Table 15: Central American Energy Policies Related to Geothermal Development Country Regulatory Framework Institutional Capacity and Knowledge Incentive Policies Costa Rica By law, geothermal development belongs to ICE. Disparate set of laws (there is a project to harmonize them). ICE has exclusivity for geothermal development. Subcontracting is allowed. ICE has ample experience in geothermal development, drills its own holes. Exemptions from consumption, ad valorem and sales tax for imported equipment and materials for RET and EE systems, feed-in tariff Goal: to produce 100percent of electricity from RE and to be the first carbon neutral country in the world by 2021 El Salvador SIGET initially awards exploration permits, followed eventually by concessions for geothermal development (200ha max); includes a development plan to be followed, requires EIA. There is confusion between regulatory and environmental permits. Bidding if more than one interested party. Awarded to original proponent if it bids 85 percent of maximum. La Geo (owned by CEL and ENEL Italy) is an example of successful PPP. LaGeo staff is well trained and can draw on the knowledge and capacity of its strategic partner. Has a drilling subsidiary. Diversification based on renewables, energy efficiency, and strengthening of regional market. Tax exemption on import duties for projects (machinery, equipment, sub transmission lines) up to 20 MW for 10 years; rent tax exemption for a period of 5 years on projects 10-20 MW, and for 10 years for projects <10 MW; VAT exemptions from all income coming from selling "CERS" for CDMs Guatemala MEM awards concessions for use of subsoil. 1-year temporary permits, 50- year definitive permits. The General Electricity Law cancelled a previous Geothermal Law which provided fiscal incentives. INDE, Govt company, interested in developing geothermal; it holds concessions for 5 fields. Awarded area was reduced from 600km2 to 100 km2 recently. INDE intends to Country requires new mapping of geothermal resources. The Govt seeks funds for a geothermal master plan. MEM intends to require bond to ensure field development. 22PDF Image | Drilling Down on Geothermal Potential Central America
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