Panama diversified energy a decade ago, Ecuador still plans to
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Ten years ago, Panama faced the same energy challenges as Ecuador today, drought and blackouts, because both countries relied on hydroelectric power and rainfall.
Panama responded in 2015 and 2016 by inviting investment and establishing rules for wind farms and natural gas production. This diversification now allows Panama to generate electricity from wind when rainfall is low.
Ecuador experienced blackouts lasting up to 14 hours daily in 2024 and anticipates power cuts for industries in 2026 to conserve the Mazar reservoir. Juan Paredes of the UN Council of Engineers for the Energy Transition notes that Ecuador’s energy demand increased from 5% to 10% after the pandemic, mirroring Panama’s 8-10% growth over the last decade.
Ecuador possesses resources like geothermal energy, rivers, and wind, and has a master electrical plan, but lacks the consistent policies to convert the plan into projects. Panama’s success offers Ecuador a model for transforming its energy sector. The two countries are pursuing a trade agreement that could facilitate technical conversations about regulation and investment.
A key project to connect the two countries is a 500-kilometer electrical interconnection between Panama and Colombia, supported by the Inter-American Development Bank, though harmonizing technical standards between countries will require time and political will. Ecuador currently holds the pro tempore presidency of the Andean power grid, Sinea, and can use this position to advance integration with Panama.
