Legislation · Guatemala
Guatemala launches mega-projects and boosts its energy future
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.
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.