In the late 1990s, Guatemala underwent a significant transformation in its electricity sector, marked by a series of privatizations that reshaped the landscape of energy distribution. This transformation began with the enactment of a comprehensive new law that clearly defined the roles of various stakeholders within the sector. Among the most notable changes were the privatization of distribution companies, including DEORSA and DEOCSA, which have since become known under the brand name ENERGUATE.

At the time of privatization, both DEORSA and DEOCSA collectively served approximately 600,000 to 1,000,000 customers. However, through strategic investments and a robust regulatory framework, ENERGUATE has managed to expand its customer base significantly. By July 2024, the company reported over 2.45 million customers, reflecting the success of ongoing investments in infrastructure. “The growth has not been without challenges, particularly in rural areas where the logistical complexities of providing electricity differ markedly from urban environments”, says Paulo César Parra, CEO of ENERGUATE.

The ongoing effort to connect rural customers has been a point of pride for ENERGUATE, as it continues to connect over 100,000 new clients each year. This year, they anticipate reaching 125,000 new connections, demonstrating their commitment to expanding access to electricity in underserved areas. As the country’s demand for electricity grows—experiencing an increase of around 7% last year and nearly 10% in the first half of this year— ENERGUATE attributes its success to significant investments in distribution networks.

Paulo César Parra recognizes the critical role of reliable energy in driving economic growth. Approximately 18-20% of the costs of various products depend on energy expenses, making the availability of quality electricity paramount for production and exportation. The company’s commitment to improving service quality is evident as it adapts to the needs of an increasingly industrial customer base that expects world-class service. As ENERGUATE continues to grow, the company is also focusing on the development of industrial parks near the Mexican border, where competitive labor can facilitate the production of goods for export. In tandem with these efforts, another company in the same group, RECSA, is addressing the challenges of energy transport to ensure adequate capacity is available as demand increases.

ENERGUATE’s recent partnerships with the International Finance Corporation (IFC) and JICA (Japan International Cooperation Agency) illustrate its commitment to sustainable growth. A $175 million credit line has been approved for investments over the next three years, further solidifying ENERGUATE ‘s plans to enhance service quality and expand its operations. This funding follows a rigorous two-year assessment of ENERGUATE’s operational practices and community relations, showcasing the confidence these international organizations have in the company’s vision.

The company acknowledges that infrastructure development within the country is essential for maintaining competitive pricing and operational efficiency. As Energuate continues to expand, its leadership recognizes the need for streamlined decision-making processes, particularly in government-led initiatives that affect energy generation and transportation.

ENERGUATE’s journey through the electricity sector illustrates both the challenges and opportunities that come with such transformations. With a steadfast commitment to growth, quality service, and infrastructure development, Energuate is poised to play a pivotal role in the country’s economic future. As Guatemala continues to develop its energy sector, the collaborative efforts of private enterprises and government initiatives will be crucial for realizing the nation’s full potential.