JUNTOS CONSTRUIMOS UN PAIS DE CALIDAD HONDURAS RENEWABLE ENERGY 2012

HONDURAS Honduras is one of the largest Central American countries with the second lowest population density. 118,890 square km, with a population density averaging 65 people per square km. Honduras has specific legislation on energy investments and development which provides access to a competitive and free market, with pricing established by supply and demand. Honduran energy coverage has expanded from 45% of the population in 1995 to 71% in Honduras is pioneering a program for a Clean Energy Market Development for small renewable energy producers that will be part of the regional network.

CURRENT RESOURCES AVAILABLE IN HONDURAS Renewable energy sources are those which provide a constant and indefinite source of raw material because of their natural ability to replenish and reproduce. Renewable energy sources come from naturally existing diverse elements, such as: WIndHydroGeothermalBiomassSolar

ADVANTAGES BiomassHydroWindGeothermalSolar Low Carbon emissions and less hostile carbon footprint Acts to limit the use of non-renewable, petroleum based energy sources, which are not available in the region. Provides an incentive for local economic and social development.

FINANCIAL INCENTIVES FOR INVESTMENT Exemption for all taxes, fees and import costs for the following: All equipment, material, spare parts, and tools destined or pertaining to projects aimed at the generation of renewable energy. Project developers will be direct beneficiaries of all incentives established in Honduran customs laws – relating to imports of machinery and necessary building equipment, as well as maintenance tools and supplies. Individual and corporate income tax exemption for materials and services related to renewable energy projects - including feasibility studies, installation, engineering, administration, construction and subsequent work to be done on the projects. For systems under 50 MW capacity – 10 year tax exemption on income; effective when a system is commissioned for commercial operations.

HONDURAN PRODUCTION POTENTIAL (Mw) Potential for energy production with renewable energy sources excedes 5,100 Mw. Only 10.4% is currently being exploited.

CURRENT RURAL ENERGY CONNECTIVITY Communities with electricity 1,159 Communities without electricity 7,800 * 998: Health Centers without access to electricity.

Average Sunlight Exposure: September 6-7 hours 7-8hours 5-6 hours

ECONOMIC ADVANTAGES for HONDURS Stable, long term, competitive pricing. Stable, long term, competitive pricing. Long term investment provides multiple benefits. Long term investment provides multiple benefits. Development of the national energy industry. Development of the national energy industry. The National Interconnection System will see its current losses reduced. The National Interconnection System will see its current losses reduced. Reduces imports of petroleum based fuel resources. Reduces imports of petroleum based fuel resources. Keeps funds available for investment within Honduras. Keeps funds available for investment within Honduras.

CONCLUSIONS Biomass production potential: 1000 Mw Projects with approved operation permits today total 700 Mw Projects awaiting approval: Mw Honduras has the land and resources for development of all renewable resources: hydro, solar, wind, biomass and geothermal. The interconnection project between Central America systems is under construction. Renewable Energy is an integral component in the National Development Plan. National investors and actors are prepared to support and complement foreign entities through financing and co-investment. Strong political will and favorable legislation promote cooperation.

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