Electricity sector in Bolivia

[5] The electricity coverage in rural areas is among the lowest in Latin America and improving it represents a major challenge in the future.

[6] In Bolivia, the National Interconnected System (SIN) connects major population centers and represents 83% of the installed capacity.

The SIN provides electricity to the largest cities and operates in the Departments of Cochabamba, Santa Cruz, Oruro, Potosí and Chuquisaca.

[7] The population in the northern and western parts of the country remains largely unconnected to the national grid, either served by the off-grid system (the Aislado) or having no access to electricity at all.

This figure does not include electricity produced in rural areas from biomass facilities, which are unorganized, decentralized, and difficult to quantify.

Imports from Brazil amount to less than 0.01 TWh per year [10] and have so far been devoted to supply the city of Puerto Suarez, in the Department of Santa Cruz.

However, the companies in the off-grid system (the Aislado) are allowed to perform more than one of the activities defined in the electricity industry (i.e. generation, transmission, distribution).

[7] The largest company is Electropaz, majority-owned by Spain's Iberdrola; followed by Empresa de Luz y Fuerza Eléctrica Cochabamba (ELFEC), which was owned by the American PPL Global until 2007.

The most important operators are:[7] Renewable energy resources other than hydropower are barely exploited in Bolivia, and their contribution to electricity generation is insignificant.

This component established that the service to households, schools and health facilities in areas of low population density would rely on locally available renewable energy sources.

[8] Bolivia is working with Brazil on a huge joint project to exploit the hydro-electric potential of the Rio Madeira complex in the Amazon region.

[17] The World Bank is financing a rural infrastructure project in Bolivia which, among others, plans to install 17,000 solar home systems by 2009.

Another project funded by the Global Partnership on Out-based Aid which is administered by the World Bank intends to scale up the installations by an additional 7000 in the next three years.

(see External Assistance below) In the mid-2010s, ENDE began building and operating large-scale solar power plants including the following: Electricity in Bolivia started in 1899, when tin magnate Simón Iturri Patiño built a Diesel-generated power plant in Uncía, which provided energy to his nearby residence and the Miraflores mine.

The hydroelectric station and power line were built in 1914 by a german company and served both urban electrification and the traction of the Cochabamba - Vinto - Arani railway.

[24] Increasing need for electricity in the mining sector led to the construction of larger hydroelectric power stations, primarily in the western areas of the country.

Because many of the larger mines were in arid regions, long distances of power transmission from the hydroelectric plants needed to be covered.

[28] Though, second world war slowed down the development of the electricity sector, because machinery and spare parts mostly came from Europe and North America.

In regards to transmission, network operation was transferred from ENDE to Transportadora de Electricidad, a private company, which acquired exclusive rights.

CESSA (Compañía Eléctrica de Sucre S.A.) and SEPSA (Servicios Eléctricos Potosí S.A. ), two pre-existing municipal distribution firms also maintained their monopolies while ELFEC (Empresa Luz y Fuerza Eléctrica Cochabamba), which was a municipal company previously to privatization, started to operate as a private firm.

[30] All these reforms, together with the introduction of a load dispatch coordination office, shaped a wholesale electricity market that seeks to simulate competitive conditions.

[31] However, the model established by this program did not have significant effects in increasing coverage, expanding infrastructure and improving service quality in rural and isolated areas.

Under the framework of this Law, the program called ‘Electricity for a Decent Living” has been designed to improve both rural and urban electrification.

The Law also mandates de creation of a Common Fund for Universal Access to Public Electricity Service (FOCO) and creates a co-financing mechanism of the National Government with Prefectures, municipalities and the private sector.

In May 2010 president Evo Morales nationalized 80% of Bolivian generation by capacity, in his Government's attempt to regain ownership of public service companies.

That is the Rio Taquesi Hydroelectric Power Project, in the province of Sud Yungas, with an effective capacity of 89.5 megawatts and estimated emission reductions of 141,691 metric tonnes CO2e per annum [39] External assistance to the electricity sector in Bolivia is heavily focused on rural electrification with no funding for large-scale generation, which has been fully privatized.

Currently, the World Bank is involved in two projects in the energy sector in Bolivia: The Inter-American Development Bank provides technical assistance through three projects in the energy sector in Bolivia: In 2005 and 2007, the Corporación Andina de Fomento (CAF) assigned US$32 million [40] and US$15 million [41] respectively to the increase of electricity services coverage through the construction of two transmission lines.

[42] The German Agency for International Cooperation (GIZ) and the Viceministry of Electricity and Alternative Energy recently signed an agreement to execute a Project for Network Densification in rural areas.

To facilitate the access to electricity, the Viceministry and GIZ will provide a US$20 subsidy per household to enable their connection to the existing network.

[43] The German development bank KfW is also financing a 5 million Euro project to improve rural access to electricity in 2005-8.