Recently published research from Business Monitor International, "Central America Infrastructure Report Q3 2012", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 07/26/2012 -- BMI View: The Central America region offers a plethora of dispersed opportunities to the adventurous investor, including renewable energy in Nicaragua and Honduras, ports in Costa Rica and Nicaragua and roads in Panama. However, there is little consistency in opportunities or rewards, and there are a myriad of risks facing the intrepid investor. Overall, the region should see robust growth in construction industry value, driven by the strong markets of Panama and Costa Rica; however, the growth is uneven and risks remain to the downside.
Central America is a mixed bag, with some areas of strong growth and investment springing up. The region is taking off as a potential renewables hub as depressed equipment providers desperately seek new markets. At the same time, the much touted Panama Canal expansion is having a knock-on impact on port investments along the region's coastlines. However, these opportunities are dispersed and scale remains small; the most successful entrants have a presence elsewhere in Latin America from which to leverage activities.
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However, at the same time, risks to investment are high, infrastructure markets are undeveloped and regulations guiding investment remain in their infancy in many countries. This, coupled with high instances of violence related to the drug trade, has disproportionately impacted Guatemala, El Salvador and Honduras.
In light of this, we can identify a few key areas of potential:
- Power: New electricity generating capacity is seeing considerable investment in Central America. Hydropower is the dominant source of electricity and will remain so, given the number of projects being developed across the region. Key hydropower projects include: the US$300mn Patuca III in Honduras, the US$700mn Tumarin project in Nicaragua, the Tres Ninas project in Guatemala, the 138MW Paz hydropower project in El Salvador and the 223MW Changuinola in Panama. The Central American Electrical Interconnection System (SIEPAC) is also nearing completion.
- Renewables: Indigenous wind and geothermal potential in the region are attracting investors who are desperately seeking new markets for renewables. The completion of Gamesa and Iberdrola's 100MW Cerro de Hula Wind Farm in Honduras is the first of many projects planned in the region. El Salvador is hoping to start its first commercial wind farm in 2016/17, and Acciona is building a 49MW project in Costa Rica. Geothermal potential is also being explored, Panama has called for companies to register interest in geothermal concessions and Ram Power has completed the first phase of expansion of its San Jacinto-Tizate geothermal plant. In February 2012, Ram Power released a statement saying that phase II of the plant is 'approximately 60% complete, with final completion expected in December 2012'.
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