Work has begun on the installation of a Central American transmission grid in Panama.

The System of Electrical Interconnection for the Countries of Central America (Siepac) project is being led by Empresa Propietaria de la Red (EPR) which is backed by Spanish power giant Endesa.

The six countries in the Siepac consortium are Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama and the 1,830 km, 230kV line will link the six national grids through 16 substations.

Companies awarded contracts for the project include Instalaciones Inabensa, a subsidiary of Abengoa, which will manage construction in Nicaragua, Costa Rica and Panama while the construction of the line in Guatemala, El Salvador and Honduras will be done by Techint Mexico.

The development is being largely funded by the Inter-American Development Bank (IADB) with $170 million in loans. Spain is providing an additional $70 million.

The presidents of Colombia and Mexico, the prime minister of Belize and the foreign minister of Dominican Republic also took part in the ground breaking ceremony held at an electrical substation near Panama City.

Along with EPR, the company that will build, own and operate the power transmission line, ICE and CNFL of Costa Rica, CEL and ETESAL of El Salvador, INDE of Guatemala, ENEE of Honduras, ENTRESA of Nicaragua, ETESA of Panama, ENDESA of Spain and ISA of Colombia are also backing the $385 million project.

EPR estimates the development, which was first announced in January 2002, will be finished by late 2008.

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