...Exposure to Government Intervention: The Salvadorian government currently subsidizes residential users with a monthly consumption below 99 kWh, and those with consumption between 100 kWh and 200 kWh. Approximately 90% of residential customers received subsidies in the last year. Government subsidies have generally been paid in a timely manner. This situation exposes the sector to political risk and creates dependence on government transfers. Fitch Ratings expects subsidies to remain in the medium term. Thermal Generation to Remain Elevated: El Salvador's power generation system is highly concentrated on thermal generation, which accounted for 49% of installed capacity and 40% of total generation in 2013. Most thermal capacity is concentrated on fuel oils. Reliance on thermal generation has increased as a result of ongoing adverse hydrological conditions in the region. Fitch does not expect important changes in the generation matrix in the short to medium term. Impact of Hydrocarbon Prices:...
