...Vertically Integrated Sector: The incumbent player in the industry is Instituto Costarricense de Electricidad y Subsidiarias (Grupo ICE), an integrated utility fully owned by the Costa Rican government that has the legal monopoly of the electricity sector in most of the country. Grupo ICE controls approximately 80% of the installed generation capacity in the country and owns the transmission grid. The electric industry includes private generation, municipal distribution and electric cooperatives that can generate energy in coordination with or sell their energy to Grupo ICE. There is no wholesale market. Elevated Political and Regulatory Risk: The Costa Rican electric sector is highly exposed to regulatory interference risk, given the lack of clear and transparent electricity tariff schedules. Tariffs are reviewed annually by the regulator and adjusted quarterly to account for changes in fuel costs. This process has been exposed to political interference. Currently, electric tariffs are...
