Country:El Salvador
Year:2007 (Dec 20th)
Policy status:In Force
Date Effective:2007 (Dec 20th)
Policy Type:Economic Instruments>Fiscal/financial incentives>Tax relief, Economic Instruments>Fiscal/financial incentives
Policy Target:Multiple RE Sources>Power
Policy Sector:Electricity
Size of Plant Targeted:Small and Large
Legal References:Decree Law No 462

The purpose of this Law is to promote investments in projects based on the use of renewable energy resources (e.g. hydro, geothermal, wind, solar and biomass) for electricity generation. The Law provides fiscal incentives for power plants from wind, solar, biomass, geothermal and hydro energy, including: 

  • 10 year import duty exemption for equipment (including transmission equipment) for plants up to 20MW.
  • Income tax exemptions:
    • 5 years for 5-10 MW
    • 10 years for 10-20 MW.
  • Tax exemption from the sale of CDM credits (CERs) or equivalent carbon credits.
  • Projects larger than 20MW can deduct exploration and project preparation costs for up to 20% per year. 

All incentives are applied exclusively only to new investments. In 2012, Agreement 162, described the technical requirement that must be fulfilled in order to apply for the incentives.

The fiscal incentives described in Decree Law No 462 (2007) are regulated by Decree 4 of 2009.

Related Documents:

In order to view full version of the Decree Law No 462 Fiscal Incentive Law for the Promotion of Renewable Electricity Generation please click here.

Last modified: Tue, 29 Nov 2016 15:59:34 CET