Region: Panama-Colombia electrical connection fails

The Panamanian government's decision to abandon plans for an electricity connection with Colombia is bad news not only for Panama, but for all of Central America.

Colombia is the region’s only neighbor capable of providing electricity at low cost and in amounts, which can help the region meet its aims for economic development.

Mexico's connection with Guatemala is useful in overcoming short-term difficulties, but Mexico's electricity prices are similar to those of Central America, while Mexico also suffers occasional supply shortages.

Vicente Prescott, Panama's energy secretary, explained that he was ready to invite bids from Colombian power companies to supply Panama, but no one could agree on a route across the swamps and jungle of the Darien Gap.

For their part, indigenous groups on both sides of the border in many cases opposed the plan.

The only way to establish the connection, Prescott said, would be for the government to finance it for a year at a cost of about $500 million.

That sounds a lot of money. Except that Prescott himself says that Panama will otherwise have to invest about $3 billion over the next three years in power plants.