The Energy Transition in Panama

Panama’s energy transition is shaped by its strategic role as a regional logistics hub and its commitment to diversifying its energy mix, enhancing energy security, and reducing greenhouse gas emissions. The country’s electricity generation is already well diversified, with approximately 70% from renewables, primarily hydropower, followed by solar PV, wind, and biomass. Panama’s Energy Transition Agenda 2020–2030 and National Energy Plan outline policy commitments to expand renewable energy, improve energy efficiency, and promote distributed generation, particularly in remote and underserved areas. The National Secretariat of Energy leads the implementation of these policies, while private sector investment plays a key role in scaling renewable projects. Panama possesses a mining sector focused on copper, particularly through the large Cobre Panamá project, which is among the world’s largest copper mines. However, Panama does not produce lithium, cobalt, nickel, or rare earth elements, remaining reliant on imports for these critical minerals essential to renewable technologies and battery storage. Challenges include hydropower vulnerability to drought, regulatory hurdles, and the need for greater grid flexibility. Yet Panama’s strong renewables base, strategic location, and regional power integration through SIEPAC position the country as a Central American leader in clean energy transition and sustainable economic development.