According to a statement from the Assembly of Panama, the resources will be used to strengthen the Energy Compensation Fund and to cover cost overruns generated by distribution companies.
"The goal of compensating electricity distribution companies for the amounts that they no longer perceive due to the stabilization of electricity rates for regulated customers, is to make payments to the electricity generating companies with mixed capital stock, so that electricity rates for end users do not increase sharply over the coming years, due to changes in petroleum products", said Omar Castillo, Deputy Minister of Economy and Finance.
Source: Asamblea Nacional de Panamá
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Electricity companies announced that there will be an increase in energy rates if Cel does not fulfill its commitment to subsidize consumption.
The scarcity of liquidity in the financial market could be the reason the Rio Lempa Executive Hydroelectric Commission (CEL) has not been able to pay the $94.7 million in subsidies claimed by the generating and distributing electric companies, according to the Technical Secretary oh the Presidency, Eduardo Ayala Grimaldi.
The National Economic Council (CENA) has approved $35.8 million to subsidize the electricity tariff.
A press release from the Ministry of Economy and Finance of Panama reads:
The National Economic Council (CENA) has approved a draft resolution by which the Cabinet authorizes the Ministry of Economy and Finance, as trustee, to transfer to the Electric Transmission Company S.
Subsidies in the last 6 years amounted to $430 million; authorities have announced reductions and the first casualties will be heavy users.
The government of Panama has taken the first steps towards cutting subsidies for electricity, and the first sector affected may consumers using between 451 and 500 kW, 2% of total users, authorities said.
The government, which currently subsidizes 50% of electricity bills for consumption up to 99 kw, analyzes continuing the subsidy.
The subsidy of $7.5 million a month currently benefits 825,000 households, which is equivalent to 62% of all the users in the country.
Laprensagrafica.com publishes declarations of Héctor Silva, the president of the Social Investment Fund for Local Development (FISDL, acronym in Spanish): “A team has been assembled to review the issue (focusing on the subsidy) and others that are on the agenda. The commission includes the Technical Secretary of the Economy. I do not want to go into details but, yes, we have begun a debate on the issue.”