THE RIGHT APPROACH

Panama 2019 | ENERGY & MINING | INTERVIEW

With seven plants in Panama and many more across Central America, AES is playing a significant role in helping Panama achieve its energy goals in a sustainable way.

Miguel Bolinaga
BIOGRAPHY
Miguel Bolinaga is the Country Manager at AES Panamá, a post he has held since June 2013. He has vast experience in the regional and global energy sectors, especially in the electricity commercialization and distribution areas. He previously served as Commercial Corporate Director and later as Vice President of Electric Market and External Relations for AES in El Salvador, where the company holds 80% market share in electricity distribution services. He holds a bachelor’s degree in administration and logistics from the Venezuelan Naval School, a master’s degree in information systems development from Simon Bolivar University, and a graduate degree in customer experience from the El Salvador Higher Institute of Economics and Business Administration.

Could you tell us about the performance of your power generation plants in Panama?

We have seven power plants in Panama. In 2018, we had 777MW installed in Panama, with 705MW based on hydroelectricity. Five of the hydro plants are in Bayano, La Estrella, Los Valles, Esti, and Changuinola; we also have a bunker-based barge. In 2015, we won a tender to deliver, starting in September 2018, the first natural gas-based power plant in Panama and Central America. At that time, we had recently completed a 381-MW plant, which has gone on to generate maximum power over the summer. This is great because hydroelectric plants do not produce much energy in the summer. This plant allowed Panama to fill the capacity gaps in the national grid. With more diverse energy sources, it is possible to have a more flexible energy market for Panamanians.

What role can LNG play in Panama?

The plant we made generates 381MW, and this is in turn treated in our LNG-based plant. It is located in a terminal that has the capacity to receive up to 160,000-cbm large ships and a 180,000-cmb storage tank. The plant uses only 25% of the storage tank; the rest is used for other important purposes. Moving forward, LNG can play a vital role in solving Panama's problems. Industries that depend on boilers and diesel fuels can all be switched to natural gas to make the industry more efficient.

How are you planning to achieve your medium- and long-term vision?

We are developing an LNG project with Bahia Investment Group. For this project, we put around 37% equity of both companies. The goal is to have the financial muscle for the other 67%. To do this, we have different multilaterals such as the IFC and the BCIE as well as local banks such as Bancolombia and Banco General. All the various state institutions must also be aligned so that the project is finished on time. The main stakeholders of this project are the banks, the partners, the state, and the surrounding communities. The community is an important factor for us, which is why we started about 10 different social projects. Our goal is to help the community grow on the back of education and training; we also provide funds to help micro enterprises work and grow.

Could you talk about the goal of reducing carbon emissions by 2030?

By 2030, there is a clear goal of reducing carbon emissions by up to 70%. That is not easy, especially when you have a company like AES that has been operating coal plants in other countries. Nonetheless, the decision to replace coal with renewables was made, and we chose gas because that is how we can create a more mature energy matrix. However, that does not mean we will not work with other renewable energies. We have several projects for 2019 and 2020, including 50-MW and 70-MW solar plants.

What are the latest initiatives affecting the social development of the country?

We have several CSR programs for the communities that surround our projects. For example, over 12 years in Changuinola, we have spent more than USD89 million on our social activities in the form of aqueducts, schools, medical dispensaries, and training. We also have a hydro-biological center where we reproduce fish that can be placed in the reservoirs behind dams. We are always aware of the communities in which we operate.

What are the latest initiatives that are affecting the social development of the country?

We have several CSR programs for the communities that surround our projects. For example, over 12 years in Changuinola, we have spent more than USD89 million on our social activities in the form of aqueducts, schools, medical dispensaries, and training. Also, we have a hydro-biological center where we reproduce fish that can be placed in the reservoirs behind dams. We are always aware of the communities we operate in.

AES surpassed its 200th shipment at the AES Andrés LNG terminal in Dominican Republic in 2019. What is the company's long-term strategy regarding LNG and its goals in Panama and the region?

AES is the main power generating company in Panama and the largest investor in the energy sector. The new natural gas-fired power plant meets strict social and environmental standards. It is a great step for Panama to become an energy and distribution hub for LNG. Additionally, AES Colón will be able to offer competitive prices by taking advantage of the existing logistic facilities offered by the country due to its strategic geographical position. According to an IDB study about Central America demand projection, 48% demand might be covered with LNG through AES Colón, positioning Panama as a benchmark in the local and regional markets.

How is AES Panama developing its non-conventional renewable energy portfolio?

As a leading sustainable energy company, our diverse combination of generation sources provides us with the strength and flexibility to adapt to local and regional market needs, maximize plant efficiency, and provide reliable and affordable electricity. Furthermore, we believe that our businesses do much more than just provide energy. Improving lives and making a lasting difference in the communities in which our businesses operate has always been part of our values and mission. We believe that it is our responsibility to provide infrastructure solutions that support a sustainable social, economic, and environmental future.

How will ETESA's bid for the electric line from Colón to Panama impact the operations of AES Colón? What's your perspective on the entry of the new Shanghai Gorgeous and NG Power plants?

AES Colón is an actor whose success is due to AES' competitiveness, complemented by the strengthening of the company's investments in Panama, which add up to USD2.6 billion in total. We have invested heavily in Panama because the country offers a level playing field and legal security. We are the main private investor in Panama's energy sector. AES Panama promotes free competition; we have participated in bidding processes which we have won and lost. Our competitiveness in the market is clear, and it is precisely due to the efficiency that AES has demonstrated over the years through the development of various projects in the country. AES' standing in the market will further strengthen with the start-up of the USD1.15-billion AES Colón Project. Equally significant, we are one of the main contributors to the National Treasury, having paid with more than USD700 million in taxes and royalties over our 20 years of presence in the country.