Costa Rica enjoys recognized global leadership for its commitment to renewable energy and sustainable policies. This leadership is no coincidence, but rather the result of a strategic vision that combines environmental protection with economic and social development. Along this path, public-private partnerships (PPPs) have established themselves as a key instrument for promoting clean energy projects, ensuring the country’s competitiveness and energy security for decades to come.
The Costa Rican government, like many others, faces budgetary constraints and restricted access to debt financing, which make it difficult to execute large infrastructure projects with exclusively public funds. Against this backdrop, partnerships with the private sector effectively attract investment, share risks, and leverage technological innovation, allowing the private sector to finance these projects. This model frees up public resources that can be directed to priority social areas without sacrificing the development of the energy sector. Although these schemes have been used mainly for roads, ports, and airports, their enormous potential in clean energy is ready to be exploited.
Costa Rica’s legal framework not only allows but actively encourages these partnerships to revolutionize the national energy matrix. Likewise, Law No. 8660 on the Strengthening and Modernization of Public Entities in the Telecommunications Sector, in force since 2008, modernized the Costa Rican Electricity Institute (ICE) to enable it to adapt to a competitive environment. This law expressly empowers ICE to enter “strategic alliances, cooperation agreements, or any other form of partnership” with public or private entities, both domestic and foreign. These partnerships aim to develop investment activities, technological development, and the provision of services related to their competencies, both within and outside the country. Based on this law, ICE issued a Regulation on Strategic Alliances and Other Forms of Business Partnership, demonstrating a clear and regulated path for the private sector to propose projects and partner with the country’s main energy institution.
On the other hand, Law No. 8345 on the Participation of Rural Electrification Cooperatives strengthens the energy model from a local and social perspective. This law authorizes rural electrification cooperatives and municipal utilities to generate, distribute, and market electricity. It also encourages partnerships by allowing them to enter into agreements not only with each other, but also with public companies such as ICE and the National Power and Light Company (CNFL), as well as with private sector partners, for the joint development of electricity generation works and services. This legislation democratizes access to energy and creates synergies to diversify the country’s energy matrix.
According to the Attorney General’s Office, a strategic alliance is a flexible cooperation agreement in which companies, including competitors or potential competitors, coordinate their capabilities and resources to achieve special advantages and become more competitive. In these alliances, the parties collaborate to achieve common goals but maintain their legal independence, without the need to create a new legal entity or company. Each partner continuously contributes in key areas such as technology or infrastructure and shares both the risks and benefits of the project in a contractual relationship that is more adaptable than a merger or acquisition.
The ICE regulations detail different partnership models, opening a wide range of opportunities. Among these is the Strategic Alliance, designed to strengthen markets or penetrate new ones by joining forces with companies with similar markets. Also contemplated is the Commercial Partnership, focused on jointly developing and marketing products or services. Another model is partnerships to provide Managed Services that offer comprehensive “turnkey” solutions to customers in electricity and telecommunications. Finally, there are partnerships for Real Estate Development, aimed at designing and building network infrastructure in projects such as free trade zones, condominiums, and technology centers. It is important to note that the initiative for an alliance can come from either ICE or an interested third party.
Looking to the future means recognizing that public-private partnerships are more than just a management model: they are a shared commitment to sustainability and progress. Costa Rica already has a solid and clear regulatory framework that facilitates innovation, intersectoral collaboration, and the attraction of investment. Strengthening and utilizing these mechanisms will not only diversify the energy matrix and advance decarbonization but also transform current energy challenges into opportunities for economic, social, and environmental growth for the entire country.