Costa Rica’s Electricity Bill Failed: How to Underwrite Power Risk

October 22, 2026

Costa Rica’s Congress archived the electricity-market reform on 19 October, so the rules for who can sell power, and to whom, stay as they were. For developers and operators with a power-hungry or power-producing project, and for the lenders behind them, that means energy supply and cost should be underwritten as a policy-dependent line, not as something a reform will soon improve.

Key takeaways

The bill fell short of the 38 votes it needed, and the government says a replacement needing only 29 votes is being drafted, with no filing date given.
The private-generation caps in the current 1990 law are not full on ICE’s own figures, so projects can still be built today, but only inside those caps.
Underwrite power supply, price and grid access as scenarios (old law, new law, no change), and ask every sponsor which one their model assumes.

What happened

On Monday 19 October the Legislative Assembly archived bill 23.414 after it missed the 38 of 57 votes (two-thirds) required in second debate, a threshold that applied because the bill created an autonomous institution (El Financiero). The bill had passed first debate on 26 May by 27 votes to 24.
Sources differ on the final tally. La Nación counts 31 votes in favor; CRHoy reports 32 in favor and 23 against. Either way it was well short of 38.
The text would have created a wholesale electricity market, let qualifying large consumers buy directly from generators, and set up an independent coordinator called Ecosen to take over system operation and planning from ICE, the state utility. It would not have given households a choice of supplier.
On 21 October President Laura Fernández said the government is preparing a new bill designed to pass with 29 votes, without saying what would change or when it would be filed (CRHoy).
An Opol Consultores poll fielded 15 to 18 October (1,200 adults, margin of error 2.8%) found 64% agree with more private participation in generation and 20.6% disagree; the article does not say who commissioned it (La República).

Chart: Private generation under Law 7200 versus legal caps, MW, June 2026

Measure	MW	Share of 3,607 MW installed
Chapter I cap	541	15%
Chapter I private generation	259	7.19%
Chapter II cap	541	15%
Chapter II private generation	267	7.4%

Source: ICE Docse report (June 2026 data), as reported by Semanario Universidad, 26 August 2026. The industry group Acope cites about 500 MW of private capacity in total, consistent with the 526 MW sum.

Why It Matters for Costa Rica

We write this mainly for developers and operators, and for lenders who finance them. Two groups of projects are exposed. The first is power producers: solar, wind, hydro and biomass developers who would have gained a wholesale market and, after 18 months, the repeal of the current caps (Semanario Universidad cites article 63 of the bill for this). The second is large power users, such as free-zone manufacturers, data and cold-chain operators and hotels, who would have gained a route to buy directly from generators. Business chambers said the rejection delays reforms needed for competitiveness, and the trade ministry said limited energy conditions reduce the country’s chances of attracting and keeping projects, though neither gave figures.

The practical point is that the current framework, Law 7200 of 1990, still works within limits. It allows private generation of up to 15% of installed capacity under Chapter I and another 15% under Chapter II. On ICE’s June 2026 data, installed capacity was 3,607 MW, each cap is about 541 MW, and private plants hold 259 MW and 267 MW respectively. That is roughly 14.6% of the system in total against a 30% ceiling. Nothing in the failure of the bill stops a permitted project from proceeding; it simply removes the prospect of a freer market on a dated timetable.

For a lender, the transferable lesson is to separate three things that a sponsor’s model often blends: the price you receive or pay for power, the volume you are allowed to sell or buy, and the counterparty. Under the current law ICE is the central buyer of private generation, so a producer’s revenue depends on a contract, a tender and a cap, not on a market. For a user, the equivalent risk is a tariff set by the regulator ARESEP. ICE’s president said in July that ICE would not file an ordinary tariff request for 2027, while a business group argued the generation tariff could fall 8.5%; we treat that figure as an advocacy estimate, not a forecast (La República).

Where the Story Is Weaker

Several things cut against a gloomy reading. The cap is not binding yet: the same report says private generation has not reached it and argues it will not do so even by 2028, and the long-term plan (PEG 2024 to 2040) projects 5,994 MW of installed capacity by 2040, which would allow nearly 1,800 MW of private generation. The government is also drafting a new bill that needs only 29 votes, and the poll suggests public support. Those points favour patience, not panic.

But the evidence is thinner than the headlines. We do not know what a 29-vote text would contain, since it apparently cannot create a new autonomous body, which was the heart of the failed design. The poll’s sponsor is undisclosed. And the cap headroom may be smaller than it looks: the same report says 16 Chapter I projects totalling 276 MW have been awarded since April 2023. If that pipeline is on top of the 259 MW already operating, Chapter I would be at 535 MW against a 541 MW cap; the source does not say whether it is, so a sponsor should be asked. The upside case needs three things to appear: a filed bill with a clear vote path, a published regulatory timetable, and awards that confirm headroom remains.

Investor Read-Through

Developers: model power-sale revenue under the existing law only, with the reform as upside. Our read, not a forecast: a project that works only if a wholesale market arrives is a policy bet.
Lenders: ask for the cap chapter, the award date and the contract counterparty for any generation project, and test debt service with the reform delayed by two years.
Operators and large users: run energy cost at the current regulated tariff plus and minus a stated percentage, and do not book savings from direct purchase until a law exists.
Fund allocators: treat energy-policy risk as a country-level factor across free-zone, industrial and hospitality holdings, and check how each manager has priced it.

What to watch next: the filing of the government’s new bill (no date announced as of 22 October) and its vote threshold. Confirm any structuring with a Costa Rican attorney or notary.

Run Your Own Numbers

Use this to stress your own deal, whether you are a property buyer sizing an operating cost, a lender testing a loan or an allocator reviewing a manager. Fill in what your model assumes, then change each line to the old-law case and see what moves.

Input	Your assumption	Effect if reform slips two years
Power price (purchased or sold)
Volume allowed (MW or kWh)
Counterparty and contract end date
Start date of revenue or savings

Illustration only, not a forecast. Take a hypothetical 20 MW solar project seeking a Chapter I slot. Cap headroom on the report’s figures is 541.05 minus 259, or 282.05 MW, so the project would use about 7.1% of it (20 divided by 282.05). If the 276 MW pipeline were additional, headroom would be 541.05 minus 259 minus 276, or 6.05 MW, and a 20 MW project would not fit. The gap between those two answers is why the question matters.

Questions to take to a sponsor, advisor or counterparty

Which legal framework and cap chapter does the model assume, and is the 276 MW award pipeline counted in the headroom?
What happens to returns or debt service if the reform arrives two years late, or never?
Who is the offtaker or supplier, and what protects the price if the tariff is reset?

Resumen en español

El 19 de octubre la Asamblea Legislativa archivó el proyecto de armonización eléctrica por no alcanzar los 38 votos; según las fuentes obtuvo 31 o 32 a favor.
La Ley 7200 sigue vigente: según datos del ICE a junio de 2026, la generación privada suma 259 MW y 267 MW frente a topes de unos 541 MW por capítulo, así que aún hay espacio.
El Gobierno prepara un nuevo proyecto que requeriría 29 votos, sin fecha anunciada; conviene modelar la energía bajo la ley actual y tratar la reforma como posibilidad adicional.

Data as of 22 October 2026. Figures marked preliminary will be revised. This is general market commentary, not investment advice.

Sources

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