With an area of approximately 51,000km2 and a population of less than 4M, Costa Rica has a history of long institutional stability, political pluralism and heavy investments in education and public health that give it a unique position among the small developing countries. After coffee and bananas, tourism is becoming the main source of foreign currency. The electric system, which covers 97% of the territory uses a dense high voltage transmission grid (230kV and 138kV). The current (year 2002) installed capacity of the country is 1429MW.

The main companies related with generation are Instituto Costarricense de Electricidad (ICE) in charge of the central planning of the electric system (government), the CompaÒÌa Nacional de Fuerza y Luz (CNFL), and the Junta Administradora Servicio ElÈctrico de Cartago (JASEC).

During 1999-2000, proposals of deregulation and privatisation at the Congress were rejected after widespread opposition and social unrest. There are as many as 30 independent power producers (each one less than 20MW) that can only sell their energy to ICE, through a Power Purchase Agreement which represent 10.6% of all power generation. Additionally there are small rural distribution cooperatives and municipal utilities.

The estimated annual rate of increase in total electricity demand over the next 10 years is 5.6%. The production is concentrated in hydro (82%), geothermal (14%), wind (3%), and imported fuels 1%. The electricity exported in 2000 was 0.531GWh against 0.022GWh of imported electricity. The average electricity price (before tax) to the end-customer is US$0.075/kWh (all customers average).

Costa Rica has eight large dams (>15m), with a total of 1.54km3 water storage. The hydro power potential of Costa Rica is 25,500MW (gross theoretical) and the economically feasible is 5800MW (evaluated in 2001). The percentage of technically feasible hydro potential that has been developed so far is 21%.

The Ministry of Environment and Natural Resources has a legal framework and environmental guidelines covering environmental impact studies for water resources development projects, including all types and dimensions of hydro power projects. Despite a substantial increase in the public awareness for the construction of hydro plants, no substantial action has been taken regarding the role and benefits of this projects.

At present time, new government polices, including budget austerity, tax fairness and up-dating, are trying to reduce the government’s internal debt, meaning very hard times for the future new ICE generation projects.