LatinFinance - March/April 2016 - 38

Tienhoven.
A pair of government-owned, coal-fired
thermal plants also are scheduled to go online in 2017. To fund the project's $2 billion
price tag, the government has allotted $800
million from the treasury, and tapped the
first disbursement of loans from a pool of
Brazilian, Italian and local lenders.
The coal-fired plants have been harshly
criticized as wasteful. José Luis Cordeiro, a
Venezuelan energy consultant, told a meeting of the American Chamber of Commerce
in the Dominican Republic that the government should have focused investment on
natural gas and renewable sources.
The Dominican Republic has been slow
to push sustainable initiatives, compared
to other Caribbean and Central American
economies. The energy and mines ministry
aims to have 400 megawatts of renewables
by the end of 2018. The government has

The Matrix

Antonio Isa
Conde

identified 80 sites where wind farms could
be developed, according to the ministry,
and a similar number of locations has been
tagged for potential solar plants.
"We have incentives for investing in
renewable energy, but wind and solar
energy are still below 5% of the mix. A few
private projects have been started and are
being developed, which is a beginning,"
says Díaz.
Estimated investment in renewable
energy is $900 million to date. Several
wind farms produce a combined 125 megawatts of electricity. Germany's Soventix is
building a commercial solar project, which
is expected to eventually generate 60
megawatts.
Exploring options
The government has not given up entirely
on oil, although it hopes to secure supply

LF: What does the pact entail?
AI: A key component is to avoid the mistakes of the past by involving
everyone so that we are all on the same page. At the same time, the government continues to work on policies and practices to reduce the losses by
distribution companies, which is a critical problem, and foment new nonrenewable and renewable sources to overcome the crisis.
LF: What is the ministry's role?
AI: We are a new ministry. The power companies are going to operate
separately until 2018, when they will be transferred to the ministry.
We are working to improve the energy matrix. We are building two coal
plants with new technology. It is one of the government's most important
projects. These plants are going to replace fuel oil plants that contaminate
much more than coal and are expensive, even with the low prices of crude.
The next step, of course, is to foment investment in thermal plants that
use natural gas and encourage renewable sources.

38 L ATINFINA NCE.COM - March/April 2016

Additional reporting by Sara Rosner and
Jennifer P. Roig

In early 2016, as the Dominican Republic prepared to launch two new coal-fired plants and
made plans to open its borders to international oil exploration, LatinFinance sat down
with Energy and Mines Minister Antonio Isa Conde. The following is an edited transcript of
the interview.

LF: What is being done to improve the electricity sector?
AI: I was in charge of the privatization of the sector in the first government of (former) President Leonel Fernández [1996-2000], but the process was aborted and the needed changes were abandoned.
We have now launched the National Pact [for Reform of the Electric
Sector] that involves all stakeholders, because the electricity sector is in
crisis. We hope the pact will help us define the future of the sector for the
next 15 years. It is like the pact for education and we want to replicate it for
electricity.

LF: What has been done with renewables?

closer to home by identifying untapped local reserves. The energy and mines ministry
has collected more than 9,600 kilometers
of seismic data and plans to hold the first
international bidding round for exploration
blocks in the second half of 2016.
Authorities expect major oil and gas
companies to take part, even though international oil prices remain low.
Luis Díaz, vice president of the Mining
and Petroleum Chamber of the Dominican
Republic, anticipates the bidding round
to generate interest because the territory
is undeveloped. "Only a few countries are
as unexplored as the Dominican Republic.
I think that we will definitely see interest
from companies that have exploration
operations in the Caribbean," he says. LF

AI: The goal is to have 400 megawatts in installed capacity in the next
three years using biomass, solar and wind plants.
We still have difficulties to overcome. The permitting process is still
cumbersome, there are issues with financing. We are working to streamline projects and trying to be creative with financing. The private sector will
take the lead, but there are joint public/private projects.
LF: Your ministry is also looking at encouraging oil and gas
exploration. Where is that today?
AI: We have made important progress in hydrocarbons, which is virgin
territory for us. We now have 9,600 kilometers of seismic lines, which did
not exist a year ago, and we have digitalized all the existing information to
prepare bidding packages.
This information will be made public in two months in a transparent
way to all interested parties. We will then move to an international bidding round later this year. Even with the market the way it is, we think that
companies will find the information very useful to evaluate blocks.
We are not trying to create false expectations. We are presenting cold,
hard information and companies will decide. We are going to tell companies, look at the results of the seismic testing and you decide.
We do not have any concessions, so it is a clean slate, and we have a
database with information that we think is very good. This is going to be
attractive, even in a depressed market.
LF: How have lower oil prices helped?
AI: The impact has been tremendous. The subsidies for electricity were
sinking public finances. We have been able to reduce them because of the
low prices. LF
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - March/April 2016
