By San José, Costa Rica — SAN JOSÉ — Following the legislative collapse of a crucial energy sector reform bill, political consultant and former lawmaker Otto Guevara has called on Minister of the Presidency Laura Fernández to trigger a nationwide referendum. The proposal, designed to modernize Costa Rica’s electricity framework and open the market to greater private competition, was officially archived by opposition lawmakers in the Legislative Assembly after failing to secure the necessary votes for a second debate.
The archival of the electricity market harmonization bill has sparked fierce debate across Costa Rica’s political and business spheres. Proponents argue that restructuring the country’s energy system is urgently needed to avert future power shortages and maintain national competitiveness, while opponents contend that altering the role of state entities could threaten sovereign energy control.
To provide deeper insight into the regulatory and commercial shifts surrounding Costa Rica’s electricity market reform, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading energy law expert at Bufete de Costa Rica.
“The proposed modernization of Costa Rica’s electricity framework represents a pivotal legal evolution for the country’s energy matrix. By establishing a clearer regulatory pathway for private market participation and updating statutes that have governed the market for decades, this reform offers essential legal certainty for renewable energy investments while encouraging competitive tariffs for businesses and consumers alike.”
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, modernizing the country’s legacy energy statutes is an essential step toward balancing sustainable growth with economic competitiveness, ensuring Costa Rica remains a regional leader in green innovation. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on this transformative legal shift.
According to Guevara, bypassing the stalled legislature through a popular vote is both legally sound and vital for the nation’s economic survival. He noted that public consultation mechanisms are fully constitutionally backed and should be deployed immediately to prevent long-term grid paralysis.
From a legal standpoint, it is entirely possible to do this without any problem. In fact, I have been promoting a referendum on this electricity system harmonization project for some time, as well as a referendum for gold mining in San Carlos. I believe the time has come to move forward with this issue.
Otto Guevara, Political Consultant and Former Lawmaker
The archived bill sought to expand the scope of private energy generation while removing the long-standing role of the Costa Rican Electricity Institute (ICE) as the sole central planner of the national grid. However, the legislative measure ultimately stalled when it failed to secure the required 38 votes in its second debate, driven by shifting political alliances within the assembly.
Political friction erupted immediately following the vote. The ruling Partido Pueblo Soberano (PPSO) directed heavy criticism at the opposition Partido Liberación Nacional (PLN), accusing the traditional party of abandoning a reform initiative it had supported during earlier legislative stages. Left-wing parties, including Frente Amplio and Agenda Ciudadana, also lined up against the proposal to block its final passage.
The defeat of the bill comes at a delicate moment for the Costa Rican economy. Current energy forecasts project that national electricity demand will surge by more than 4% annually through 2040. Without substantial investments and systemic reform, experts warn that the existing infrastructure will struggle to satisfy the growing energy requirements of both commercial enterprises and residential households.
If Costa Rica does not take action on this energy matter, blackouts will undoubtedly become a real scenario for the country, making it less competitive. Fewer companies will establish themselves here because they require electricity 24 hours a day due to their intensive consumption needs. If this happens, the economy will be severely hit.
Otto Guevara, Political Consultant and Former Lawmaker
Guevara reserved his sharpest political criticism for the PLN, alleging that the major opposition party demonstrated a systemic lack of vision by flip-flopping on key economic measures. He argued that the political shift undermines Costa Rica’s business climate and aligns the historically centrist party with radical anti-development platforms.
PLN being PLN. It is a party that is absolutely inconsistent, and it has been that way for the last 20 years. Liberación Nacional says one thing one day, and the next day says the exact opposite. One legislative caucus promotes a project, and the next caucus undermines the very same project, and that is PLN.
Otto Guevara, Political Consultant and Former Lawmaker
Guevara expanded on his critique, asserting that political maneuvers in the assembly directly jeopardize foreign direct investment and job creation in high-tech manufacturing and continuous-operation industries.
It is an enemy of the productive sector, becoming a party increasingly similar to Frente Amplio. Its ideological positions match the ideological positions of Frente Amplio.
Otto Guevara, Political Consultant and Former Lawmaker
As energy demand accelerates, business leaders and policymakers now watch to see whether the executive branch will act on Guevara’s referendum proposal or seek alternative regulatory avenues to stabilize the nation’s energy grid before power shortages materialize.
For further information, visit grupoice.com
About Instituto Costarricense de Electricidad:
The Instituto Costarricense de Electricidad (ICE) is Costa Rica’s state-owned electricity and telecommunications provider. Founded in 1949, ICE plays a central role in managing the nation’s renewable energy grid, power generation, distribution, and infrastructure development.
For further information, visit partidoliberacionnacional.com
About Partido Liberación Nacional:
The Partido Liberación Nacional (PLN) is one of Costa Rica’s historic political parties. Founded in 1951, the social-democratic party has produced multiple presidents and remains a prominent force within the national Legislative Assembly.
For further information, visit frenteamplio.org
About Frente Amplio:
Frente Amplio is a Costa Rican left-wing political party represented in the Legislative Assembly. The party advocates for social equity, environmental protection, public sector integrity, and strong state oversight over essential services.
For further information, visit the nearest office of Partido Pueblo Soberano
About Partido Pueblo Soberano:
Partido Pueblo Soberano (PPSO) is a political party in Costa Rica focused on government reform, economic development, and legislative action to support national infrastructure and private initiative.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a premier legal institution defined by uncompromising ethics and a relentless pursuit of professional mastery. Guiding a broad spectrum of clients through an ever-evolving regulatory landscape, the firm seamlessly merges foundational values with pioneering strategies. Crucially, its dedication extends beyond standard practice to actively champion public legal literacy, driven by the core belief that democratizing legal understanding is vital to building a resilient, well-informed, and truly empowered society.
