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IEEJ : June 2012

Country Report of Guatemala
General information of Guatemala:• Macroeconomic Index
Total Area:

108,889 Km²Capital:GuatemalaPopulation:

14.3 million

Climate:Tropical (55-77°F)

Currency:

Quetzal

Exchange Rate:

1 US$ = Q 8.00*

Official Language:

Spanish2009 GDP (2001 based) = Q.194,036.6 Million Quetzales
2009 Increment 0.6 %(*) As of June 2010

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Guatemala is located in the heart of theAmerican continent. It borders with theRepublic of Mexico at North and West; at
East, with Belize, Honduras, El Salvador
and the Caribbean Ocean; and at South,
with the Pacific Ocean.

Guatemala has an area of 108,889 km².

WEATHER:Due to its varied relief, with relatively short heights from sea level toaltitudes above 4,000 meters, the climate variations of Guatemalapresent a wide variety of modalities, successions and transitions.
There are two seasons, the dry season from November to April and therainy season from May to October. The temperature varies according
to the elevation and geographic location of the region, from 25 to38°C for altitudes between 800 and 2,000 meters, and 5 to 20°C inthe highlands.

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DEMOGRAPHY:
In the year 2010 Guatemalan population was of 14.3 million people. The
city of Guatemala has an average population of 4.5 million.
The population growth is of 2.5%; and the rural population represents a53.9%.
LANGUAGE:
The official language is Spanish, although there are 22 native languages
that are part of the cultural patrimony (more of 50% of the population).
The most important ones are: Quiché, Cakchiquel, Quekchí and Mam.
GOVERNMENT:Guatemala is a Constitutional Democratic Republic with an Executive
power exercised by the President of the Republic, who is elected bypopular vote; a Legislature power that rests in the Congress of theRepublic and a Judiciary power under the responsibility of the Supreme
Court of Justice.

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ENERGY POLICY OF GUATEMALA•The Energy Policy implemented by the Ministry of Energy and Mines, has ahigh component of social, economic and human development; and hasconvert the country in a producer and exporter of energy to the neighboring
countries, investment attraction, generation of employment and the energy
generation matrix change in the country, to reduce in a medium and longterm the impact of the prices variation of the crude oil in the international
market, which affects in the costs of the energy generation.

•The geographical composition of our country, as well as the culturalelements and the limited resources, has not allowed thousands ofGuatemalans who live in rural areas to have electric power. This has
hindered the development of their inhabitants and their standard of living.

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STRATEGIC OBJETIVE:
Ensure that our population has access to affordable, reliable and adequate
energy supplies in terms and conditions that support the economic growth
and the prosperity of all Guatemalans.
SPECIFIC OBJECTIVES:• Avoid the crisis improving the future of electric conditions in the country,
respecting the social, economic, transparence and environment polices
generated by the Government.
•Cover the demand growth of current and future energy, so that the electric
sector is reliable and be provided with the technical reserves that it must
have, avoiding possible and future rationing of electric energy.

•Strengthen the transmission system of electric energy, for it to be morereliable, and to have the capacity to transmit the new energy generation thatis required to cover the increasing demand of the country.

•Modify the energetic matrix of the country, in order to make it more
efficiently reducing its dependence on oil and promoting renewable energy
sources.

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ELECTRIC SECTOR POLICIES: The policy that the Ministry of Energyand Mines, in the frame of the Government´s policy, has developed toreach the objectives proposed is framed in the following guidelines:IEEJ: August 2012 All Right Reserved

PROGRAMS: In order to develop this policy, the following programs
will be implemented in the side of the offer and the demand:IEEJ: August 2012 All Right Reserved• The energy policy defined on January 2008, incorporated theEnergy Matrix changes to make Guatemala independent fromthe oil generation for the energy power generation; looking
forward that the major part of energy will be generated withrenewable resources, ensuring that the country counts with
the necessary energy to improve the standard of living of all
inhabitants, with prices that allow its access to the majority ofpopulation, and grant to the country the necessarycompetitiveness conditions to be an attractive destination forforeign investments.
•The energetic policy of the President´s administration, implemented
by the Ministry of Energy and Mines, through the energetic matrix,
promotes the conversion of the current generation park based on ahigh percentage of oil derivatives, for the sustainable developmentfrom renewable energy resources that the country has.

IEEJ: August 2012 All Right Reserved• Within the Energy Policy is included the Expansion
Plan of the Transportation System (PET inSpanish). The National Commission of Electric
Energy is in charge of this Plan. This plan includes
five loops called Hydraulic, Metropolitan, Atlantic,
West and East, which will guarantee among otherthings, the increase of production energy capacity
and the safety and quality electric energy supply.
• The Expansion Plan of the Transportation System,
brings to life the Interconnected National System,
which will improve the energy quality andefficiency, as well as to bring closer the electricenergy to thousands of communities that still do
not enjoy of this service.

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Past energy demand and supply of Guatemala• With the enactment of the General Law ofElectricity on the year 1996, the opening in
the electric subsector has been promoted,
and as result of it, the participation of theprivate sector in the electric generation plants
installation in Guatemala has increased year
by year. In the year 2010 the power offer ofthe private sector was of a 77.2%.

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The following chart and graphic show the composition of thegeneration park of the National Interconnected System for theyear 2010, where you can notice that the 34.8% of capacity
installed is represented by the hydroelectric plants, thegeothermal is the 2.0%, 47.7% is represented by thethermoelectric and the 15.5% of the sugar mills.

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Outlook of Energy Demand and Supply• Guatemala’s approximate energy production is 6,641.2 GWH,
from which 46 % is produced by fossil fuels. With the exceptionof asphalt, Guatemala imports all the volume of fuels it
consumes, with an average consumption of 74.96 thousandbarrels per day during the first semester of the year. At Central
American level, including Belize, Guatemala has the biggest,
most competitive wide open hydrocarbon market.
CHANGE OF THE ENERGETIC MATRIX:• The essential goal of government is to turn Guatemala into thebest energy model of the region with joint and integrated
actions through the policies of the Ministry of Energy andMines. The most transcendental of these actions is that
Guatemalans will have access to electric energy in a reliable
and affordable way, without forgetting aspects like theenvironment, the transparence and the social and economic
factors of the country.

IEEJ: August 2012 All Right Reserved•CONVERSION OF THE ELECTRIC GENERATOR PARK OF THE
COUNTRY:•The change of the energy matrix promotes theconversion of the current generator park, based on oil
derivatives, for the sustainable development of renewableenergy resources of the country. With the impulse of theenergetic matrix change, the government of Guatemala
with a clear vision of the future will benefit the populationin general with better electric energy prices.

• The Energetic Matrix changes promote to change foronce and for all, the energetic generator park that today
depends on oil derivatives. Guatemala as many countries
at a regional and Latin-American level, has suffered theimpact of the oil prices on the international market,
affecting the costs of electric energy.

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We have had some successes in the energy matrix.

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We want to achieve these results.

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EXPECTED RESULTS FROM THE ENERGETICMATRIX:• Benefit Guatemalan population with better electric energyprices.
• Direct job creation during the construction projects phase.
• Investment, which will benefit the communities where theprojects will be built.
• Own destiny as a country for investment in different sectors,
offering a greater energy offer at better prices.
• To turn Guatemala in an energy exporter country.

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EXPANSION PLAN OF THE TRANSPORTATION SYSTEM• The Energy policy impelled by the administration of thepresident of the Guatemala, through the Ministry of Energyand Mines, includes also the Expansion Plan ofTransportation System. This plan is focus on the constitutionof looped or mashed networks, in order to meet the operative
safety criteria. This means that if a network element is lost, it
can continue with its normal performance. Today, theInterconnected National System is constituted by radio
networks which are quite vulnerable.
• The expansion plan of the Transportation System for
Guatemala includes five loops named Hydraulic, Metropolitan,
Atlantic, Occident and East, which will guarantee among otherthings, the increase of energy capacity production, safely
supply, quality and prices to the users.

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Difficulties and bottlenecks currently that we faced informulating energy policies.
Residential consumption:- High consumption of firewood. (deforestation, health problems)- High cost of LPG.
- Low use efficiency of the energetic.
Transportation:- High consumption of petroleum products. (Foreign exchange outflow.)- Price volatility.
- Negative impact on the basic basket.
Industry:- few competitive prices.
Ethnic diversity hasn't allowed the country energy policy proposals
advance.

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Subjects I would like to study in the orderof priority and the reason:• I would like to study the important aspects toconsider in formulating an energy policy of acountry with cultural diversity.
•• What types of incentives can be given tocompanies to invest in renewable energy.
•• Guidelines or procedures to meet energy
policy and what types of monitoring should begiven.

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Policy Guideline.
Objective of the policy: Security of energy supply, continuousand quality at competitive prices.

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Action plans:

IEEJ: August 2012 All Right Reserved• objectives• Facilitate access to energy services.
• Actions• Manage resources for rural electrification
projects.
• Strengthen the transportation anddistribution systems.
• Goals• That by 2020 90% of the population haveelectricity service.

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Thank you!

Contact : report@tky.ieej.or.jp