Guatemala launches mega-projects and boosts its energy future

BLP Legal - On 23 April 2025, the Guatemalan Ministry of Energy and Mines (MEM) and the National Electricity Commission (CNEE), officially announced the launch of tenders for (1) PEG-5 of EEGSA, DEOCSA, and DEORSA and PET-3 of the MEM, representing an important step in developing the country’s energy sector.

PEG-5

The main objective of PEG-5 is to procure up to 1,400 megawatts (MW) of firm power and associated energy (power guaranteed as an efficient firm offer to cover firm demand) and up to 150 MW of installed capacity. These concessions aim to supply electricity to regulated end users for 15 years.

The Power Purchase Agreements (PPAs) will be awarded on 30 January 2026, and new or operating generation plants will be eligible to participate, with scheduled supply commencement dates to be agreed upon from May 1, 2030, 2031, 2032, or 2033. New plants or operating plants that undertake additional investments or power source changes (in combination with renewable sources) will be eligible for PPAs for up to 15 years. Existing operating plants are eligible for PPAs up to 5 years.

The contracts will be entered into under schemes such as (i) Load Curve Contract for Difference, (ii) Power Purchase Option Contract, and (iii) Generated Energy Contract, under the Commercial Coordination Rule No. 13 of the Wholesale Market Administrator (AMM) and their award will be based on the lowest total cost for end-users.

This tender allows the participation of various generation technologies, prioritizing renewable sources such as photovoltaic, hydroelectric, wind, and geothermal, resulting in the most ambitious Guatemalan energy project in the sector’s history.

Key highlights:

• The current PEG-5 tendering process contemplates the largest volume of long-term contracts since the creation of the Electricity Law, representing more than 65% of Guatemala’s ongoing maximum energy demand.
• The procedure encourages using new generation technologies with base energy, including one block of up to 700 MW of generation plants capable of supplying energy throughout the year.
• Although operating plants can participate, in contrast to previous tender procedures, such plants must invest at least 25% of their capacity in new investments.

Tender procedure

Following the launch of the tender, participants will have until October 10, 2025, to submit requests for clarification of the tender documents, which are now available for purchase by interested parties for $10,000. The established deadline for issuing amendments that correct, clarify, or modify the bidding documents is October 31, 2025. Submitting and opening technical offers is on November 1, 2025. Subsequently, the economic evaluation of the offers will take place on January 15, 2026, and contract awards are expected by January 30, 2026. Awarded contracts shall be signed within three months.

The tender will be divided into two blocks: (i) the base block, which corresponds to the energy required for all hours of the day, and (ii) a complementary block, intended to cover the remaining demand, under the terms of reference of the tender, approved by CNEE’s resolution No. CNEE-270-2024.
 

PET-3

PET-3 seeks to award works of mandatory execution as part of the Transmission Expansion Plan 2024-2054 and its purpose is to expand the transmission infrastructure that distributes energy throughout the country, through the execution of 14 new priority infrastructure projects, which have been organized into 4 lots, including the construction of more than 500 kilometers of transmission lines and 14 new substations with voltage levels ranging from 69kV to 230kV.

Additionally, PET-3 aims to strengthen the national electricity transmission system to improve the operational security and quality of electricity supply, extend coverage to currently non-connected regions, facilitate the connection of new generation plants, and optimize the energy flow to consumption hubs.

This tender process will be carried out within six (6) months from the launch of the tender, including the call for tenders, informative meetings, presentation and opening of technical and economic offers, evaluation by the CNEE and final awarding. The tender documents are available to interested parties for $10,000.00. The awarding of the projects is scheduled for November 2025. Since MEM has not yet published the official tender schedule, we will update procedures as they occur.

Both tenders provide an attractive platform for investment, positioning Guatemala as a potential regional leader in clean and sustainable energy.

1. EEGSA, DEOCSA and DEORSA are large electricity distribution companies in Guatemala.

2. The Wholesale Market Administrator or Administrador del Mercado Mayorista (AMM) is a private non-profit organization established by the government of Guatemala. Its objective is to ensure the country’s supply and security of electricity.

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