LatinNews Daily - 11 September 2025

*El Salvador’s 60-member unicameral legislature has approved a new bill which creates regulations to oversee and promote geothermal energy in the country. According to a national assembly statement, the general directorate of energy, hydrocarbons, and mines (DGEHM), which is responsible for overall energy policy, will be in charge of supervising, inspecting, and granting permits related to geothermal energy. It will also be authorised to develop public policies, issue technical regulations, and manage concessions which must be approved by the legislature. The same statement cites Dania González, a deputy for President Nayib Bukele’s Nuevas Ideas (NI), as saying that the country’s “dependence on traditional sources like hydropower, combined with the effects of climate change, makes it essential to diversify the energy matrix to ensure a secure and sustainable energy supply which is affordable for the public”. The new legislation sets out key stages for the development of geothermal projects, including prospecting, exploration, and exploitation. It also provides tax breaks aimed at attracting new investment for the development of geothermal projects. These include exemption from tariffs for a decade on the import of machinery and materials used exclusively to construct or expand geothermal plants, as well as exemption from income tax for a decade for income derived from geothermal energy generation and the sale of certified emission reductions (CERs), which are earned by greenhouse gas mitigation projects.

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