OREANDA-NEWS. Fitch Ratings expects generation capacity in Costa Rica will increase by nearly 930MW through 2018, and that all new plants will be hydro or wind plants. This is in line with the government's aim to have a generation matrix entirely based on renewable resources by 2021. In the medium term, electricity demand should increase 2%-3% annually. In Fitch's view, the country will require investments of near USD4 billion in new generation capacity and associated transmission infrastructure over the next five years in order to maintain a balance between supply and demand.

Grupo ICE is the integrated utility that fully controls the sector. The company is building the biggest hydro plant in Central America, PH Reventazon, with a capacity of 305MW. Grupo ICE expects to finance its investments with a combination of internal cash flow; debt; build, operate and transfer transactions; project finance vehicles; and operating leases. The government expects that independent power producers (IPP) will build plants and sell the energy to Grupo ICE. There is nearly 400MW to be assigned to IPP to use to generate electricity from renewable resources, mainly from hydro and eolic plants.

The full report 'Costa Rica Electricity Sector - Strong Relation to Government Strategy ' is available on 'www.fitchratings.com' or by clicking on the link below.