Remarks by Treasury Under Secretary David Malpass
AES Colon natural gas energy plant
Panama, August 17, 2018.- On behalf of Treasury Secretary Mnuchin, I would like to begin by congratulating President Varela, the Panamanian authorities gathered here today, and the AES Corporation for achieving the milestone of commissioning the landmark AES Colon Project.
It is no coincidence that the first natural gas power plant in Central America and the first full-scale receiving terminal in the region is being commissioned today in Panama. Our respective governments have embarked on programs of renewing economic growth and increasing prosperity for all our citizens. The commissioning of the AES Colon Project marks the beginning of a new era for Panama’s energy resources and its role in regional economic and energy development in Central America.
The AES Colon Project serves as a critical vehicle for the people of Panama to achieve their energy, environmental and economic development goals. The natural gas infrastructure that AES has developed provides access to cleaner-burning natural gas and the ability to displace expensive and dirty legacy heavy fuel oil and diesel power plants. Access to natural gas and the ability to generate power from this fuel source will also increase the flexibility of Panama’s generation system. This will allow Panama to realize its goals of integrating large-scale intermittent renewable energy into its grid.
The Project did not occur in a vacuum. The Panamanian authorities’ successful formulation and effective implementation of market-oriented reforms in recent years to institute competitive markets and increase openness and transparency provided the essential legal and administrative foundation for the successful development and financing of this large, capital-intensive project on a limited recourse basis. These market-oriented reforms have led to both tremendous private sector investment in Panama, as well as extremely impressive and global commerce-changing investment in the expanded Panama Canal.
Later today, I will co-sign the U.S.-Panama Energy Investment Memorandum of Understanding. The U.S.-Panama Energy Investment MOU that we will sign is part of a broader U.S. Government-led initiative called America Crece, The Americas Grow. The program is designed to further open and unleash value in energy markets and catalyze private sector capital in the United States and elsewhere so that the region can realize its energy and infrastructure goals. Private capital, not state-led investment, is the key to developing sound and high functioning energy systems. This project and its financing is testament to Panama moving forward firmly on just such a commercially oriented path.
I very much look forward to the signing of this energy investment MOU and to the commencement of concrete and mutually beneficial collaboration. I would like to personally thank President Varela for his hospitality in hosting us at the Presidential Palace for the signing ceremony.