Cerrón Grande hydroelectric project, northwestern El Salvador
Courtesy Inter-American Development Bank

Because El Salvador has no known oil deposits, it has long depended on imported oil (which frequently has constituted a large share of total imports). The oil shocks of 1973 and 1979 prompted the government to develop alternative forms of energy, such as hydroelectric and geothermal power. Although dependence on foreign oil lessened during the 1980s, about one-third of El Salvador's energy in 1986 still came from imports. The government owned a monopoly on imported petroleum products and sold them at a high profit to domestic refineries. In turn, to keep bus fares low the government used these oil sales revenue to subsidize diesel bus fuel. This policy, ironically, greatly increased commercial and industrial gasoline prices.

The growth of energy production was impressive through the 1960s and 1970s (largely as a result of the construction of geothermal and hydroelectric power plants) but slowed significantly in the 1980s. Energy production rose by 9 percent a year between 1965 and 1980 but decreased to only 3.6 percent a year in 1980-86. The growth in energy consumption also slowed, from 7 percent a year in the 1965-80 period to only 1.5 percent annually from 1980 to 1986. Per capita energy consumption, however, increased from 140 to 216 kilogram equivalents of oil per capita between 1965 and 1986.

From 1981 to 1985, four hydroelectric power plants (Guajoyo, Cerron Grande, 5 de Noviembre, and 15 de Septiembre) provided about 50 percent of the country's electricity, geothermal plants provided about 40 percent, and thermal plants generated about 10 percent. Guerrilla sabotage continually targeted electric power plants and power lines. In fact, the steady growth in energy production and consumption was quite remarkable, given the frequency of these attacks. By 1985 guerrillas had destroyed over 1,000 high-tension electrical towers and had damaged almost every power plant in the country. During a three-week period in January 1986, guerrilla forces blew up over 120 electrical posts and 9 electrical towers, intermittently leaving about 85 percent of the country's population without electricity.

To diminish the impact of guerrilla attacks on power plants, the Salvadoran government signed an agreement with Honduras in early 1987 for the annual purchase of about US$15 million in energy from the El Cajon hydroelectric power plant, scheduled to open in 1989. In 1987 the government also announced that a Belgian company was planning to build a US$8 million geothermal power plant the company agreed to accept Salvadoran shrimp as barter payment.

Data as of November 1988