JUNTOS CONSTRUIMOS UN PAIS DE CALIDAD

1. HONDURAS RENEWABLE ENERGY 2012 JUNTOS CONSTRUIMOS UN PAIS DE CALIDAD

2. 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 2007. • Honduras is pioneering a program for a Clean Energy Market Development for small renewable energy producers that will be part of the regional network.

3. 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: Geothermal WInd Hydro Biomass Solar

4. ADVANTAGES • 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.

5. 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.

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

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

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

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

10. CONCLUSIONS • Biomass production potential: 1000 Mw • Projects with approved operation permits today total 700 Mw • Projects awaiting approval: +1000 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.

11. ThankYou!