Countries of the Andes agree to consolidate regional electricity integration and interconnection

Bolivia, Chile, Colombia, Ecuador and Peru have signed the ‘Santiago Declaration’, reaffirming their political commitment to integrating and interconnecting their electricity grids to create an Andean regional electricity market.  

Representatives from each country signed the Declaration during last week’s Ministerial Meeting of the Andean Electricity Integration System (SINEA), held in Santiago, Chile, on 15 July 2025.  

The Declaration will help progress implementation of the SINEA 2020–2030 roadmap, which includes calls for a strengthening of the Ecuador–Peru electrical interconnection and ongoing studies for the interconnection between Bolivia and Chile. It will also support bilateral discussions between Chile and Peru, and between Colombia, Ecuador and Peru.

In addition, concrete steps were recognised at the meeting on ‘subregional regulatory harmonisation’, including regulatory adaptation in Colombia, Ecuador and Peru for the implementation of Decision 816 of the Andean Community of Nations, as well as Chile’s efforts to adhere to this regulatory framework, according to the Bolivian Energy Ministry. Decision 816 establishes a framework for the exchange of electricity among member countries in support of creating a regional electricity market. It forms part of the broader Andean Regional Electricity Market (MERE) initiative, which seeks to integrate the energy sectors of the member states.

Meanwhile, in a ‘significant step towards regional integration and energy transition’, Bolivia and Chile also signed a memorandum of understanding in Santiago to strengthen bilateral cooperation in energy matters, reports the Bolivian Energy Ministry. This will facilitate ‘joint actions in key areas such as renewable energy, energy efficiency and regional electrical interconnection’, with a ‘focus on sustainability, social inclusion and environmental respect’.

Bolivian government to invest nearly $39mn in new electricity projects in La Paz

Bolivia’s Energy Ministry also reports that the government has unveiled plans to spend $38.9mn on 23 new electricity projects in La Paz, west-central Bolivia, over the 2025 and 2026 administrations. Aiming to promote access to energy for all, the Ministry says the programme will directly benefit more than 12,000 users in 18 municipalities.

The government is also planning to invest some $177mn in the current administration on generation, transmission and distribution projects, including the Río Miguillas hydroelectric project, which is under construction. The project comprises two hydroelectric plants – Umapalca (86 MW) and Palillada (119 MW) – located in the municipalities of Quime and Cajuata. It is expected to be fully operational by December 2026.  

In addition, a new Vinto–Mazocruz 230 kV line and substation in Patacamaya are being built, infrastructure that will allow the local distributor to have a new withdrawal point to meet growing electricity demand in the region and facilitate the future injection of energy from the planned 81 MW Patacamaya solar PV project. Construction of the solar farm is expected to begin in 2026, with commissioning slated for 2027.

A number of electrical grid extension projects are also due online in 2025, according to the Ministry, including projects in the municipalities of Palos Blancos, Caquiaviri and Charazani.

Chile initiative seeks to improve energy access in remote regions

Meanwhile, in neighbouring Chile, the Chamber of Deputies has approved a bill that aims to improve both access to, and the quality of, electricity supplies in remote areas of the country, including Los Lagos, Aysén, and Magallanes in southern Chile.

Regulation for both medium-sized (<200 MW capacity, operating separately from the national electricity grid) and off-grid systems is to be ‘modernised’ under the bill, according to Chile’s Energy Ministry. It reports this will ‘ensure that families and industries have better access to energy and greater tariff equity, allowing electricity to become a driving force for the development of these territories and improve the quality of life of their inhabitants’.

Planning processes will be updated, with a focus on supporting renewable energy and storage. It is also planned to encourage the country’s 109 existing off-grid systems to transition to medium-sized systems, allowing them to reduce their electricity bills and access the regulated rates currently available between Arica in northern Chile and Chiloé, an island offshore southern Chile.  

Bolivian biodiesel plant to help cut fuel imports

In a bid to reduce dependence on imported fuels, the Bolivian government plans to invest $66.5mn in the Héroes de Senkata Biodiesel Plant II, with a view to it coming onstream later this year. The facility is located in El Alto, the second largest city in the country and which is adjacent to La Paz. It will have a production capacity of 1,500 b/d of biodiesel.

 

In parallel, the government plans to continue exploring for hydrocarbons, investing $11mn in the 2025 fiscal year on projects in the Mayaya Centro area, including the drilling of two wells. Some $85mn has already been invested in exploration in the La Paz region over 2021–2024, with the Mayaya Centro X1 IE project identifying hydrocarbon resources in the non-traditional Lliquimuni area located in the northern sub-Andean region of the country. As a result, the Bolvian Energy Ministry forecasts oil revenue for La Paz will reach $78.97mn in the next fiscal year.

 

The government is also promoting access to natural gas in both urban and rural areas of La Paz, planning to install some 20,000 new residential gas connections that will benefit nearly 100,000 people.

 

In addition, some 5,020 public and private vehicles are to be converted to run on natural gas, according to the Ministry.

 

A new biodiesel plant is due onstream later this year in a bid to help Bolivia reduce its dependence on imported fuels

Photo: Bolvian Ministry of Hydrocarbons and Energy