REN25 Chapter 5 Costa Rica : simplebooklet.com

37Renewable Energy 2025Alta BatallaAlta Batalla focuses on Banking and Finance, Real Estate, Hospitality, International Commerce, Customs, Antitrust, Corporate and transac-tional, Energy and Environment, Foreign Investment, Labour, Intellectual Property, Public Procurement, Public Law, Dispute Resolution, Technology and Telecom and Taxes. We have a sustainability committee composed of three subcommittees: diversity and inclusion, equity, and environment. From this platform, various activities are carried out, including corporate responsibility. Additionally, we have a cross-functional practice in ASG (Environmental, Social, and Governance). The impact of our work and pro bono efforts has been recognised by different national and international organisations.www.altalegal.comRaúl Guevara Villalobos holds a graduate degree in Law from the University of Costa Rica. He pursued a Master’s degree in Environmental Law at the University of the Basque Country and a Master’s degree in Natural Resource Management with an emphasis on Environmental Management from UNED. Additionally, he has studied Environment and Energy at Vermont Law School, Leadership at Harvard Law School, and Sustainable Capitalism, Environment, Social, and Governance at the University of California, Berkeley, among others. Raúl is a partner and director of the Environment, Climate Change, and Energy Practice at Alta Legal, as well as the coordinator of the firm’s ASG (Environmental, Social, and Governance) group. With 25 years of experience, Raúl advises companies on environmental law, energy, and climate change. He has provided guidance during contract management for infrastructure development related to roads, ports, sanitation, drinking water, and energy. Raúl serves as Secretary of the Costa Rican Association of Electricity Producers and coordinates the Environment and Climate Change Commission of the Free Zones Association, among other roles. He has extensive experience in administrative litigation and has participated in several international investment arbitrations. Raúl is recognised as one of the leading professionals in environmental law, energy law, and public law in Costa Rica by Chambers and Partners, LACCA, and The Legal 500, among others.Alta BatallaErnesto Rohrmoser Blvd. Sabana Business Center building12th floor, Alta Batalla offices. La SabanaMata Redonda districtSan JoséCosta RicaTel: +506 403 620 00Email: raguevara@altalegal.comLinkedIn: www.linkedin.com/in/raul-guevara-villalobosManuel Alejandro Serrano Mora is a Law student at the University of Costa Rica. Manuel is a young lawyer-to-be, passionate about multiple areas of Laws and has been working at Alta for two years, initiating his career path in one of Costa Rica’s top law firms. Alta BatallaErnesto Rohrmoser Blvd. Sabana Business Center building12th floor, Alta Batalla offices. La SabanaMata Redonda districtSan JoséCosta RicaTel: +506 403 620 28Email: mserrano@altalegal.comLinkedIn: www.linkedin.com/in/manuel-a-serrano-mora-6ab609215

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Table of Contents151020Expert Analysis ChaptersQ&A ChaptersThe Rise of Green Hydrogen and Renewable Energy DevelopmentMhairi Main Garcia, Watson Farley & WilliamsSplit Decision: A Look into how Developers can Seek to Optimise their Battery Storage Procurement Strategy and Capitalise on the Current Wave of Development of Utility-Scale Battery Storage FacilitiesOliver Irwin, Ronen Lazarovitch, Tom Swarbrick & Brandon Price, Bracewell (UK) LLPAustriaChristoph Cudlik, Christoph Jirak, Julia Kandler & Sarah Wolf, Schönherr Rechtsanwälte GmbHBrazilRaphael Paciello, José Roberto Oliva Junior, Daniel Costa Rebello & André Vivan de Souza, Pinheiro Neto Advogados147GermanyDr. Wolf Friedrich Spieth, Niclas Hellermann, Sebastian Lutz-Bachmann & Marcus Liedtke, POSSER SPIETH WOLFERS & PARTNERS48GhanaGideon Ofori Osabutey, Selasie Atuwo, Kwabena Oppong-Kyekyeku & Frank Atese Kwabena Amuh, OAKS Legal38GreecePanagiotis (Notis) Sardelas, George E. Fragkos & Andreas P. Mastroperros, Sardelas Petsa Law Firm69IndonesiaFrédéric Draps, Khairunissa (Nissa) Yuliandhini & Rachelia Jumanti, Oentoeng Suria & Partners (Ashurst OSP)59IsraelAdv. Dr. Tzipi Iser Itsiq & Adv. Sagi Jay Agmon, Lipa Meir & Co.88JapanSadayuki Matsudaira & Nobuaki Mori, Nishimura & Asahi79PortugalJoão Louro e Costa, Jill de Soet Palmeiro & Francisco Fráguas Mateus, Uría Menéndez106RomaniaCristina Gavrila, Andreea Caragui, Patricia Vilceanu & Alexandru Pruteanu, Glodeanu si Asociatii SPARL96United Arab EmiratesMhairi Main Garcia, Watson Farley & Williams126United KingdomOliver Irwin, Robert Meade, Nicholas Neuberger & Kirsty Delaney, Bracewell (UK) LLP114ZambiaReagan Blankfein Gates, Reagan Blankfein Gates Legal PractitionersZimbabweNikita Madya & Chantele Anele Nothabo Sibanda, Wintertons13830Costa RicaRaúl Guevara Villalobos & Manuel Alejandro Serrano Mora, Alta Batalla

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Renewable Energy 2025Chapter 530Costa RicaCosta RicaAlta Batalla Manuel Alejandro Serrano MoraRaúl Guevara Villalobosthe wellbeing of Costa Rica’s citizens. ICE Is the largest gener-ator of electricity in Costa Rica and has the largest distribu-tion and commercialisation in the country, as well as absolute control over transmission.Likewise, there are Municipal enterprises such as Administrative Board of the Electric Service of Cartago (JASEC), Heredia’s Public Services Company (ESPH) and Cooperatives (such as COOPELESCA, COOPESANTOS, COOPEGUANACASTE, COOPEALFARORUIZ) and the National Company of Light and Power (CNFL), who constitute the main generators and distributors in concessioned territories. Meanwhile, private generators can only produce to sell elec-tricity to the ICE under some limitations.1.3 Describe the government’s role in the ownership and development of renewable energy and any policy commitments towards renewable energy, including applicable renewable energy targets.The governmental role divides into several tasks:1. Rector of the Energy Sector: The Ministry of Environment and Energy (MINAE). MINAE is the Costa Rican govern-ment ministry responsible for issuing environmental policies related to environmental protection, sustainable management of natural resources, and renewable energy sources. MINAE oversees general planication and regulation of energy. In addition to this, efforts against climate change and decarbonisation goals that require renewable energy sources are controlled by MINAE.2. Planning: While MINAE is the governing body respon-sible for overall planning, the law assigns ICE the respon-sibility of planning electricity demand. For this purpose, ICE plans through generation expansion plans, which it typically issued every two years.3. Agents of the National Market of Electricity, which are ICE and CNFL. CNFL is a public-private company controlled by ICE and, therefore, is part of the ICE group. As mentioned previously, ICE is the dominant agent in the generation, distribution and commercialisation market, and is the only one player in transmission.4. Agents of the Regional Market: ICE is the only agent authorised by Costa Rica to participate in the Central American Regional Market.5. Regulator: The supply of electricity in Costa Rica is consid-ered a public service. Control of the quality of service provision, efciency and rates is under the responsibility of the Public Services Regulatory Authority (ARESEP). ARESEP also grants concessions to private generators with a PPA with ICE and issue technical regulation.1 Overview of the Renewable Energy Sector1.1 What is the basis of renewable energy policy and regulation in your jurisdiction and is there a statutory definition of ‘renewable energy’, ‘clean energy’ or equivalent terminology?Costa Rica is a global leader when it comes to ensuring that electricity production comes from renewable energy sources; 98% of its electricity matrix comes from renewable energies, and it has important achievements in preventing deforest-ation (around 25% of the country’s land surface is protected National Parks and other protected areas). Since 1942, Costa Rican public policy and energy regula-tions have aimed for 100% of electricity generation to come from renewable sources, with a strong initial focus on hydro-electric energy. The Constitutional Politic of Costa Rica (1949) reserves the hydraulic forces into the domain of the State. The Law of Creation of the Costa Rican Electricity Institute (ICE) of 1949 assigns this institution the obligation to the develop the hydroelectric energy. This Law mandates the promotion of economic development through the satisfaction of energy demand using renewable energies.Law 7200 of 1990 authorises private generators to produce only renewable energies to sell to ICE for its distribution. In addition, the Act 8345 authorises cooperatives and munic-ipal companies of public services of 2003 generate electricity from both renewable and non-renewable sources. Act 10086: Promotion and Regulation of Energetic Resources Distributed through Renewable Sources describes Renewable Energy Sources as energy sources that are subject to a natural repo-sition process, and which are available in the immediate envi-ronment, such as sun energy, wind, biomass and water.Additionally, there is vast complementary legislation to the previous one and public policy that promotes renewable energy and limits thermal generation.1.2 Describe the main participants in the renewable energy sector and the roles which they each perform.Costa Rica has a state oligopoly in the electrical energy sector. The main actor is ICE, which is a public institution entrusted with the rational development of physical energy sources owned by the nation, especially hydroelectric resources. The fundamental responsibility of the institute, in service to the Costa Rican people, is to channel the utilisation of hydroelec-tric energy to strengthen the national economy and promote

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31Alta BatallaRenewable Energy 2025There are also some participations in energy distribution.Additionally, its inference has promoted the transition to safer and eco-friendly currents, as well as a development and production of this sector in compliance to environmental practices and legal frameworks. Civil society participation can be consulted in the following chart of agents of the national energy market: https://apps.grupoice.com/CenceWeb/documentos/1/1001/6/Lista%20de%20Agentes%20del%20SEN.pdf 2.4 What is the legal and regulatory framework for the generation, transmission, and distribution of renewable energy?The energy legal framework heavily promotes renewable energy in Costa Rica. It can be organised as:1. Regional regulation: Law 7848: Approval of the Central America Electric Market Framework Treaty.2. General Regulation: Law 449: Law of Creation of the Costa Rican Institute of Electricity; Law 5961: Declares of public interest Geothermic Resources; Law 6227: General Law of the Public Administration; Law 7152: Organic Law of the Ministry of the Environment and Energy; Law 7200: Law that Authorises Autonomous or Parallel Electric Generation; and Law 8345: law of Participation of the Cooperatives of Rural Electrication and Municipal Public Services Enterprises in National Development.3. Distributers: Law 2: Raties Electrical Contract SNE (National Electric System) – CNFL (Light and Power National Company); Law 3300: Creates the Board of Electric Service of Cartago JASEC; Law 7789: Transformation of the ESPH; and Law 8345: law of Participation of the Cooperatives of Rural Electrication and Municipal Public Services Enterprises in National Development.4. Distributed resources: Law 10086: Promotion and Regulation of Energetic Resources Distributed from Renewable Sources (2021).5. Environmental: Law 7554: Organic Law of the Environment (1995); and Decree 43898: Regulation of environmental Evaluation, Control and Tracing, Nationally Determined Contribution (NDCs), National Plan of decarbonisation, Climate Change Strategy Pl, etc.6. Technical regulations issued by ARESEP.7. Energetic efciency: Law 7447: Regulation of Rational Use of Energy.This and more of the legal frame can be consulted on the website https://energia.minae.go.cr/?page_id=1444 2.5 What are the main challenges that limit investment in, and development of, renewable energy projects?Despite a worldwide leadership, there are multiple challenges and deficiencies in the strategy and conditions of Costa Rica:1. Complex and unrealistic goals that exceed the generation of energy through renewable sources and focus on energy efciency.2. The absence of a legal framework in the energy sector and the existence of outdated legislation that does not align with the needs of users, the country’s competitiveness, and technological developments.3. The absence of effective governance that ensures proper planning in the sector; the lack of a market, as well as legal restrictions preventing private entities from gener-ating electricity for sale to distributors.2 Renewable Energy Market2.1 Describe the market for renewable energy in your jurisdiction. What are the main types of renewable energy deployed and what are the trends in terms of technology preference and size of facility?The market is composed from the mentioned statal interve-nors, such as MINAE, ICE, municipal companies and ARESEP. As mentioned, market agents are: ■ ICE in generation, transmission, distribution and commercialisation. ■ CNFL, Cooperatives and municipal companies in genera-tion, distribution and commercialisation. ■ Private generators. Independent private generators are restricted to a limited capacity, technologies and gener-ation, and cannot, between the totality of private gener-ators, surpass the 30% of the national system’s capacity (15% under build-operate-own (BOO) models and 15% under build-operate-transfer (BOT) models).Based on DOCSE information, in May 2024, the energy generation was: ■ 49.73% hydro. It is important to note that hydro-power generation during the rst semester of this year was affected by El Niño. In terms of installed capacity, hydropower represents approximately 68% of the entire National Electric System. ■ 13.38% wind. ■ 11.64% geothermic. ■ 0.22% solar. ■ 1.00% biomass.2.2 What role does the energy transition have in the level of commitment to, and investment in, renewables? What are the main drivers for change?There is a huge commitment and investment in Costa Rica regarding renewable energy. The country aspires to be a regional and worldwide leader in clean energy, as it has been since the 1970’s, where the first transition began. Nowadays, Costa Rica pursues to produce its entirety of energy through renew-able energies, taking advantage of its economic, productive and safety efficiency; having already achieved more than 95% of its energy being produced through renewable sources, even up to 99% in rainy years. Social and environmental compromise and protection, commitment against climate change, as well as the international image of the nation, are the main drivers to achieve this aspiration. The current challenge for the upcoming years is the transition to an electrified transportation sector, and the National Plans of Development pursue to maintain the generation of energy through renewable sources.In 2024, ICE has promoted two bids to subscribe new PPAs for a total of 80 MW (Mega Watts) of Eolic energy and another 80 MW of solar energy. There is a future bid process for another 80-100MW of solar energy.2.3 What role, if any, has civil society played in the promotion of renewable energy?A vital role. Mainly, the civil society has developed further generation plants (especially in the wind and hydric sectors), which produce and sell their energy to ICE, as well as other actors such as Cooperatives, which distribute the power current to the citizens and have a main role in the development of the electrical and economic sectors in rural areas.

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32 Costa RicaRenewable Energy 20255. Environmental: Law 7554: Organic Law of the Environment (1995); Decree 43898: Regulation of envi-ronmental Evaluation, Control and Tracing, Nationally Determined Contribution (NDCs), National Plan of decarbonisation and Climate Change Strategy.6. Technical regulations issued by ARESEP.7. Energetic efciency: Law 7447: Regulation of Rational Use of Energy. This and more of the legal frame can be consulted on the website https://energia.minae.go.cr/?page_id=1444 3.2 Are there financial or regulatory incentives available to promote investment in/sale of utility-scale renewable power?There are multiple tributary incentives to promote the construc-tion of electrical centrals for distributed energy. They figure in: 1. Law 449, Law 7200 and Law 8345: ICE, private gener-ation companies, cooperatives and municipal compa-nies count with a series of tributary exonerations in imports of generation, control, regulation, transforma-tion and transmission of materials and equipment for electricity production, as well as the construction and operation of plants, in accordance to this law, as well as incise 2, article 7, annex 3 of the Law 7017 of Incentives for Industrial Production.2. Distributed energy and energetic efciency. Law 7447 of Rational Use of Energy exonerates of the payment of the consumption selective tax, ad valorem, sales, and Law 6946 Tax for the fabrication and import of equip-ment for the generation of renewable energies such as solar panels, control systems, static converters, Eolic and hydroelectric generators, among others. 3.3 What are the main sources of financing for the development of utility-scale renewable power projects?The main sources for development can be divided in: ■ ICE: through multilateral Banks and Bonds issuing. ■ Cooperatives and municipalities: multilateral Banks and national-private Banks. ■ Private Generators: investment funds and private banks.3.4 What is the legal and regulatory framework applicable to distributed/C&I renewable energy?The applicable frameworks are Law 10086 of Promotion and Regulation of Energetic Resources Distributed from Renewable Resources (and its regulation, Decree 43879) as well as ARESEP’s methodology to establish tariffs of charges for interconnection of distributed energetic systems to the national electrical system network.3.5 Are there financial or regulatory incentives available to promote investment in distributed/C&I renewable energy facilities?Article 7 of Law 10086 establishes that, with the realisation of investments and technical studies regarding the integra-tion of distributed energetic resources to the electric network, its cost-benefit shall be recognised by ARESEP through tariffs, proportionally to these activities. Article 13 establishes that, to promote the development of projects of distributed generation 4. Governmental inefciency in the development of public policies that optimised the electrical system, aspiring to a cost-reduction of the service, maintaining its quality, trust, and environmental safety, as well as a development in normative policies that do not consider the energetic, social, and economic context of the country. 2.6 How are large utility-scale renewable power projects typically tendered?The development of renewable energy projects and operation tendered and granted in accordance with the procedures of Law 7200. Through this process, private actors can develop two types of plants: (a) up to 20 MW through a BOO contract; or (b) from 20 MW to 50 MW through a BOT contract. In both cases, ICE makes a tender competition according to Law 7200 and Decree 37124 (for BOT’s and BOO’s respectively) to deter-mine which plants will be constructed and contracted.In the case of distributors and ICE projects, a bidding proce-dure is carried out to contract an EPC under a turnkey contract.2.7 To what extent is your jurisdiction’s energy demand met through domestic renewable power generation?According to the Plan of Generation Expansion of 2022, in 2021, the total capacity installed in distributed photovoltaic systems connected to the National Electric System can provide up to 71 MW. 3 Sale of Renewable Energy and Financial Incentives3.1 What is the legal and regulatory framework for the sale of utility-scale renewable power?The country does not have a spot transaction market or an auction-based contract sales market. As previously mentioned, ICE conducts long-term plant contracting processes. The contract establishes the terms under which the generators sell their energy to ICE. The price is set annually by ARESEP based on a series of methodologies. The legal and regulatory frame-work consists principally of the mentioned: 1. Regional regulation: Law 7848: Approval of the Central America Electric Market Framework Treaty.2. General Regulation: Law 449: Law of Creation of the Costa Rican Institute of Electricity; Law 5961: Declares of public interest Geothermic Resources; Law 6227: General Law of the Public Administration; Law 7152: Organic Law of the Ministry of the Environment and Energy; Law 7200: Law that Authorises Autonomous or Parallel Electric Generation; and Law 8345: law of Participation of the Cooperatives of Rural Electrication and Municipal Public Services Enterprises in National Development.3. Distributers: Law 2: Raties Electrical Contract SNE (National Electric System) – CNFL (Light and Power National Company); Law 3300: Creates the Board of Electric Service of Cartago JASEC; Law 7789: Transformation of the ESPH; and Law 8345: law of Participation of the Cooperatives of Rural Electrication and Municipal Public Services Enterprises in National Development.4. Distributed resources: Law 10086 Promotion and Regulation of Energetic Resources Distributed from Renewable Sources (2021).

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33Alta BatallaRenewable Energy 20253.11 Are there financial or regulatory incentives or mechanisms in place to promote the purchase of renewable energy by the private sector?These incentives are inexistent due to a legal mandate that requires the promotion of renewable energy generation and, in case of private generators, they can only generate energy to be sold to ICE, which directly commercialises it to users, and not otherwise. 3.12 Is there a mandatory (or a developed voluntary) carbon emissions trading market in your jurisdiction?The Domestic Carbon Market is a voluntary market that procures the country’s efforts to achieve carbon neutrality. Through carbon credits denominated in Costa Rican Compensation Unities (UCC), which equivalates to a metric ton of carbon, companies can participate in the local voluntary market. More information regarding the market and its func-tioning can be consulted at https://cambioclimatico.go.cr/wp-content/uploads/2019/01/Guia-para-Participacion-en-Mercado-Domestico-Carbono-Costa-Rica.pdf 3.13 What is the legal and regulatory framework applicable to the development of carbon capture and storage projects?The Carbon Neutrality Country Programme (PPCN) of 2012; Agreement -36-2012 – MINAET; Decree 37926-MINAE of November 11 of 2013; Decree 41122-MINAE of May 28 of 2018; and current Decree 42884-MINAE of May 13 of 2021. 3.14 Are there financial or regulatory incentives available to promote investment in carbon capture and storage projects?With the compliance and efforts of companies in the reduction of emissions and participation in the carbon market, compa-nies can achieve an official recognition of “Carbon Neutrality” from the Costa Rican government.3.15 What are the main sources of financing for the development of carbon capture and storage projects in your jurisdiction?National Banking.4 Consents and Permits4.1 What are the primary consents and permits required to construct, commission and operate utility-scale renewable energy facilities? Does the consenting and permitting regime differ for specific types of renewable energy facilities, such as nuclear, offshore wind, battery storage, or others?Based on the Generation Expansion Plan and the needs of the National Electric System, ICE establishes contracting proce-dures with private parties to sign PPAs. The requirements are generally the same. In the case of hydroelectric power, there are some additional requirements because the State has public domain over the water and its power:for auto consumption on social-need population or small and medium enterprises registered upon the Ministry of Economy, projects inferior to fifteen kilowatts of nominal power are exempt from complying with the requirements defined by ARESEP.3.6 What are the main sources of financing for the development of distributed/C&I renewable energy facilities?Equity, investment funds, as well as national Banks and multi-lateral-cooperation Banks are the main sources. The final user normally has an operative leasing provided by the company of distributed energy services. 3.7 What is the legal and regulatory framework applicable to the development of green hydrogen projects?Costa Rica has a policy but does not count with a proper regu-latory frame for this type of project. This policy, Decree 43366-MINAE: Officialisation of the Policy for the exploitation of exceeding resources in the National Electric System, for the development of a green hydrogen economy. This policy pursues to stimulate the investigation and has the main objective to promote and incentivise an economy of green hydrogen by pursuing the development of a flexible regulatory framework from ARESEP to facilitate distributor companies to exploit energy surplus of the national electric system, through its commercial management. It explains that, by examining the market’s conditions and infrastructure limitations, the surplus in distributed generation cannot be totally exported to the Regional Electric Market, therefore, the exploitation of surplus through other methods is fundamental. This requires a flexible regulatory and tariff frame for the absorption of the exceeding capacity produced nationally; this, in hand with the decarbon-isation of the transportation sector, can help exploit and make the most out of the renewable energy production in Costa Rica, as well as the development of the green hydrogen projects.3.8 Are there financial or regulatory incentives available to promote investment in green hydrogen projects?Inexistent to this date.3.9 What are the main sources of financing for the development of green hydrogen projects in your jurisdiction?Inexistent to this date.3.10 What is the legal and regulatory framework that applies for clean energy certificates/environmental attributes from renewable energy projects?The Sistema de Reconocimientos Ambientales (SIREA) is an initia-tive of the MINAE, established by Executive Decree No. 41594-MINAE and under Act 7554. Its purpose is to integrate existing environmental recognitions in the country under specific technical requirements.In December 2024, ICE received the recognition from LSQA to certify the data of served demand as well as renewable generation in the National Electric System, that allows ICE to certify to its clients the use of clean energy.

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34 Costa RicaRenewable Energy 2025National Electric System, in a common interconnection point; as well as commercial and regulatory conditions to access a surplus sale tariff, duly approved by ARESEP. ■ Compliance with Law 10086 and Decree 43879. ■ Counting with an ADMS system to administer distrib-uted resources, according to technical requirements of ARESEP and the System Operator and the interconnec-tion contract. ■ Counting with a basic feasibility-technical study of the installation and interconnection according on the system’s size. ■ The installation of a bidirectional energy meter.4.5 Are microgrids able to operate? If so, what is the legislative basis and are there any financial or regulatory incentives available to promote investment in microgrids?Yes, they can operate. The regulations are the same as described above for distributed energy. Most of the distrib-uted energy projects operate in parallel to the grid without being interconnected.4.6 Are there health, safety and environment laws/regulations which should be considered in relation to specific types of renewable energy, or which may limit the deployment of specific types of renewable energy?No, there is not. It applies to general EHS regulations. The only one specific to the energy sector is the obligation to carry out an environmental impact study instead of other kinds of envi-ronmental impact assessments. However, in the development of these kinds of projects and depending of the contractor and financing, other legislation such as OSHAS could apply.5 Storage5.1 What is the legal and regulatory framework which applies to energy storage and specifically the storage of renewable energy?The mentioned decree 43879 in its chapter III regulates storage systems, operation, and utilisation modalities, as well as the obligations of the owners of energy storage systems.5.2 Are there any financial or regulatory incentives available to promote the storage of renewable energy?No there is not. Auto consumption of generated energy without payment of consumption tariffs to ICE. Additionally, the surplus of energy production can be sold (exclusively) to ICE or a distributor under a PPA contract.5.3 What are the main sources of financing for the development of energy storage projects in your jurisdiction?Same as mentioned above. ■ The rst authorisation is called “elegibilidad”, granted by ICE. Through eligibility, ICE determines that the project is suitable according to the expansion plan and deter-mines the preliminary point of connection to the trans-mission network. ■ In the selection of projects to be developed, connection studies must be realised by ICE to discard inconsistent projects, or which interfere with ICE’s projects. ■ Feasibility studies: geological; market; nancing; and environmental, among others. ■ Projects must include prices and tariffs established by ARESEP.In general terms, the main requirements established by Law, are: ■ Water – Power concession in case of hydro. ■ Approval of the environmental impact study. ■ Construction permits. ■ Public service concession grated by ARESEP. ■ PPA and Interconnection Agreement.4.2 What are the primary consents and permits required to construct, commission, and operate distributed/C&I renewable energy facilities?General compliance with ARESEP’s, System Operator and the national technical norms and requirements. Depending on the size and capacity of the resource of distributed generation, as well as interconnection point and impact on the network, requirements may vary. Nonetheless, main responsibilities and obligations are defined in article 9 of Decree 43879: (a) compliance of the property’s electric installation with Decree 36979-MEIC: Regulation of Officialisation of the Electric Code of Costa Rica; (b) design, inspection, and construction of the generation system performed by a professional duly incor-porated to the Federated Body of Engineers and Architects of Costa Rica (CFIA); (c) perform correct final dispositions of resi-dues in the systems of generation and storage of energy; and (d) authorisation from ICE to install the generation system and the interconnection to the National Electric System.In case the project will sell energy to the distributor, it requires a public service concession.4.3 What are the requirements for renewable energy facilities to be connected to and access the transmission network(s)?Through the Norm of Planification, Operation and Access to the National Electric System AR-NT-POASEN and Resolution RE-0143-JD-2021, both approved by ARESEP, the main requirements of interconnection are established. The process is divided into two phases: ■ Preliminary study. ■ Final study and contract.4.4 What are the requirements for renewable energy facilities to be connected to and access the distribution network(s)?The requirements are: ■ An interconnection contract between ICE and the owner of a distributed energetic resource, which establishes the general and specic conditions of interaction of the distributed energetic resource and its affection to the

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35Alta BatallaRenewable Energy 2025Also, ARESEP is the administrative authority in charge of resolve conflicts of competence related to territory that arise between providers.7.3 What are the key criteria applied by the relevant governmental authority or regulator to determine whether a practice is anti-competitive?Since there is not a competitive market in Costa Rica, this is not a concern.8 Dispute Resolution8.1 Provide a short summary of the dispute resolution framework (statutory or contractual) that typically applies in the renewable energy sector, including procedures applying in the context of disputes between any applicable government authority/regulator and the private sector.1. Administrative conicts. ARESEP is the main authority with the competence to resolve conicts between util-ities, and between utilities and consumers, applying an administrative procedure. The nal decision could be challenged before the Administrative Contentious Tribunal.2. Normally, BOOs between ICE and generators have a stag-gered clause that begins with negotiation and, if this fails, one must resort to the contentious administrative jurisdiction.3. Normally, BOT contracts between ICE and generators have a staggered clause that begins with negotiation and, if this fails, one must resort to arbitration or to the contentious administrative jurisdiction.8.2 Are alternative dispute resolution or tiered dispute resolution clauses common in the renewable energy sector?They are used especially in BOTs and some EPC contracts for the development of utility-large scale renewable power projects with ICE.8.3 What interim or emergency relief can the courts grant?Courts have a broad discretion to grant interim or emergency relief. Based on the Administrative Litigation Procedural Code, these interim or emergency reliefs must be addressed in a proce-dure separate from the main process through a special injunc-tion procedure. It is possible to file this injunction procedure before filing the main lawsuit when it is demonstrated that urgent Court action is required. In this latter case, if the Court accepts the measure, there are 15 days to file the main lawsuit.The party requesting an emergency relief in the injunc-tion procedure has to demonstrate that: (i) the measure satis-fies the public interest or, at least, does not harm the public interest; (ii) there is a relationship between the precautionary measure and the main process; (iii) the theory of the case and the claim in the main process is reasonable; and (iv) the measure is necessary to prevent serious or irreparable harm.6 Foreign Investment and International Obligations6.1 Are there any special requirements or limitations on foreign investors investing in renewable energy projects?In independent private companies dedicated to the genera-tion of distributed energy, at least 35% of the social capital must be owned by Costa Rican citizens. ICE is the sole buyer of contracts of long-term supply, purchasing all the energy produced by independent generators. Due to this dominant role in the energetic sector, the sell and market of surplus produced by distributed energy resources must be sold exclu-sively to this institution and cannot be sold to other compa-nies, limiting transactions of opportunity and contracts between particulars.6.2 Are there any currency exchange restrictions or restrictions on the transfer of funds derived from investment in renewable energy projects?These restrictions are inexistent.6.3 Are there any employment limitations or requirements which may impact on foreign investment in renewable energy projects?These restrictions are inexistent.6.4 Are there any limitations or requirements related to equipment and materials which may impact on foreign investment in renewable energy projects?Applies to general regulations related to hazardous products and energy efficiency. 7 Competition and Antitrust7.1 Which governmental authority or regulator is responsible for the regulation of competition and antitrust in the renewable energy sector?Since there is not a market in a strict sense, there is not much competition or antitrust concerns. However, competence relies on ARESEP.7.2 What power or authority does the relevant governmental authority or regulator have to prohibit or take action in relation to anti-competitive practices?Since there is not a competitive market in Costa Rica, this is not a concern.However, pertinent laws in the energetic sector, as well as the legal framework, reviewed in questions 2.4 and 3.1 above, establish ARESEP as the main comptroller in charge of the correct, efficient, and trustworthy functioning of the National Electric System. In this position, they have complete authority and power to perform all licit and required measures to guar-antee the upmost quality of the service.

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36 Costa RicaRenewable Energy 2025was designed and applied in order to achieve several goals and employ mechanisms to combat and adapt to climate change. These two national plans have been a starting point to develop and gestate new laws and regulations, as well as motivate the general public, civil society, and all governmental insti-tutions into the appliance of modern and safe methods to combat climate change and achieve zero emissions. In this way, renewable energy resources are key, and have been a safe bet for the Costa Rican government to contribute to achieving these goals, therefore, procuring more investment, interest, and development on the renewable sector.9.2 How do you envisage the renewable energy landscape in your jurisdiction evolving over the next five years? Currently, the country is immersed in the discussion of a bill that aims to change the model of the electricity sector. As mentioned, one of the weaknesses is the lack of regulatory framework and existing regulations that do not align with the country’s growth needs and electricity demand satisfaction. According to the 2023 Competitiveness Index of the Council for the Promotion of Competitiveness, the energy dimension is the number one that affected negative the competitiveness of the country. While Costa Rica has far surpassed the initial phase of energy transition by having an electricity matrix highly based on renewable energies, the high dependence on hydroelectric energy poses a challenge due to climate variability. Additionally, it has not been possible to achieve the goal of decarbonising the economy, which is increasingly reliant on fossil fuels, resulting in increased greenhouse gas emissions. To achieve the electri-fication of sectors currently highly dependent on fossil fuels, a significant investment is required. Just to meet the projected demand for electric vehicles, we would need to double the installed capacity of the current generation park before 2050.While achieving changes and establishing a competitive market in electricity generation may be challenging, there is hope for improved governance and planning. Additionally, removing certain restrictions could allow private generators to expand investment in renewable energy generation. This includes increasing the current limit of 30% relative to the total installed capacity of the system and enabling sales to distributors other than ICE, as well as large consumers.8.4 Is your jurisdiction a party to and has it ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and/or the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and/or any significant regional treaty for the recognition and enforcement of judgments and/or arbitral awards?Yes, it has.8.5 Are there any specific difficulties (whether as a matter of law or practice) in litigating, or seeking to enforce judgments or awards, against government authorities or the state?No, there are no specific difficulties.8.6 Are there examples where foreign investors in the renewable energy sector have successfully obtained domestic judgments or arbitral awards seated in your jurisdiction against government authorities or the state?Yes, there are some examples. On July 16, Initec Energy was notified of a positive award obtained in the arbitration between Initec and ICE, under an EPC contract for the geochemical plant Pailas II ( https://ciarglobal.com/espanola-initec-gana-arbitra-je-al-instituto-costarricense-de-electricidad/ ).9 Updates and Recent Developments9.1 Please provide a summary of any recent cases, new legislation, regulations, and policy announcements in renewables in your jurisdiction.Costa Rica’s government has applied strong measures against climate change and decarbonisation. In the past 10 years, the strengthening of the legal framework and national plans has aspired to achieve goals, for example, the National Plan for Decarbonisation (2019) envisions the conversion of the country to a modern economy, green and free of emissions, procuring to achieve zero net emissions by the year 2050. Also, the National Policy of Adaptation to Climate Change 2018–2030

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