Panama Investor Blog

State Budget To Be Discussed In Panama

The Budget Committee of the National Assembly is scheduled to discuss the proposed state spending plan today.

The proposed 2016 spending plan is $20.1 billion.

Commission Chairman Jorge Alberto Rosas said the executive submitted the plan last week with changes that had been suggested after a series of meetings.

The committee recommended increasing the budgets of various entities, including the Ministry of Public Works, the University of Panama, the Ministry of Education, the Ministry of Health, the University of the Americas, the Panama Maritime Authority, the National Council for Development, the judiciary and the Public Prosecutor's Office, among others.

The budgetary recommendations can add close to $200 million to the budget.

Pineda explained that he is recommending reducing the budget of entities such as the Cold Chain.

Billion Dollar Deal for Solar Power in Panama

From Kenya to Bangladesh via Djibouti and Egypt, 2015 has been a year of grandiose development announcements for Canadian solar developer SkyPower, and the company is not quite done just yet.

This week SkyPower CEO and president Kerry Adler met with the President of Central American nation Panama, Juan Carlos Varela, to discuss the terms of a $1 billion investment in the country’s solar energy sector (link in Spanish), including plans to build 500 MW of large-scale solar farms over the next five years, as well as the construction of a $50 million solar and environmental research center.

The center will be dedicated to the advancement of solar PV innovation and other environmental sciences, with the aim being to "distinguish Panama as the definitive hub for new solar technologies and innovation in Central America".

SkyPower also states that it will fund the scholarships of 250 Panamanian students that are currently studying in the fields of solar technology and environmental sustainability. Funding will be provided via an annual grant of 10 scholarships per year, during the 25 years that the installed solar farms are generating power.

"SkyPower invests in countries that uphold their environmental sustainability and preservation while advancing their economies and industries," Adler said. "The future of Panama looks bright, as the leadership of Panama is clearly focused on the need for clean, renewable energy, and has embraced solar as a cost-effective means of addressing Panama’s energy needs today and as a critical part of its generation mix for its bright future."

SkyPower CCO Charles Cohen added that the $1 billion investment will also create an estimated 10,000 "total job years" in the country, as well as potential opportunities for Panama to export its own solar panels to other markets

Delay's in Panama Canal Expansion will cost Millions in Revenue

It is estimated that the Panama Canal will lose about $450 million in expected revenue due to delays in the opening of the expansion.

The project was supposed to be finished in October 2014, but the new opening date is April 2016.
The Panama Canal Authority (ACP) has projected a loss of $1 million per day for the delay.
Despite the recent leaks that were discovered in the Pacific locks, the contractor GUPC said that the project is still on track to be ready next April "after seven years of work and more than 100 million hours of work."

The contract was awarded to GUPC for $3.1 billion. It was supposed t be finished in 1,883 days.
The consortium has presented more than 10 claims to increase the amount of money it will receive. Those claims are in various stages of resolution.
Last January, a dispute resolution board partially granted the contractor a payment of $233 million and allowed it 176 additional days to deliver the work.

If that claim is upheld, it would still mean the project is delayed 350 days.
The contract includes a penalty of $300,000 for each day the project is delayed. ACP Administrator Jorge Luis Quijano said that any penalties will be resolved after the project is completed.
"It will be handled by our attorneys, but we are being economically affected by the delays," he said.

Airlines Looking to Expand in Panama!

Panama continues to be on the radar of major airlines. In the first months of 2016, Emirates Airline and the German carrier Lufthansa will begin service to Panama.

Talks are also being held between transportation officials and the Israeli airline El-Al and Turkish Airlines.
Tocumen Manager Joseph Fidanque III said that meetings have also been held with representatives from Virgin Atlantic, owned by billionaire Richard Branson, owner of Virgin Group.
This airline is considered among the most luxurious within the industry and operates transatlantic flights from London, England.
The expansion of Tocumen will enable the arrival of more wide-body planes, which are those used by European and Asian airlines for long-haul flights.
Currently 21 airlines operate out of Tocumen. The facility handles 15 million passengers a year.

$500 Million Colon Project Begins!

President Juan Carlos Varela Monday witnessed the beginning of the $500 million urban renewal project in Colón.

The work is being done by the consortium Nuevo Colón, comprised of the Panamanian firm Cusa and the Brazilian firm Odebrecht. It was awarded in June and includes the construction of 5,000 houses and improvements to water and sewage systems.
The event was held in a park on Avenida Central. It was attended by hundreds of people and included displays of the area's Afro-Caribbean culture. It culminated with a fireworks show.
"Long ago, I dreamed of this day in which we will move together to recover the city of Colon and rescue its cultural heritage," Varela said. "We will develop the great tourist and commercial potential that this city has."

The president also said he will push for the approval of a law to make the city a duty-free zone. That move is expected to help tourism in the city, which has a large cruise port.