PEG-5 Tender: Guatemala Boosts Clean Energy Growth Through Incentives Law
Guatemala’s Renewable Energy Incentives Law supports the PEG-5 tender, offering tax exemptions and enabling up to 1,500 MW of new generation capacity from clean energy sources.
The Incentives Law for the Development of Renewable Energy Projects stands as one of the key legal frameworks supporting Guatemala’s PEG-5 Generation Expansion Plan, the largest electricity system expansion process ever carried out in the country, aimed at attracting private investment and accelerating the transition toward clean energy.
A Legal Framework Supporting Renewable Energy Investment
Enacted under Decree 52-2003, the law establishes a set of fiscal and customs incentives designed to lower investment costs for companies developing solar, wind, hydroelectric, and geothermal energy projects. Its primary objective is to facilitate private sector participation in renewable electricity generation and strengthen the country’s long-term energy supply.
According to data from the Renewable Energy Department of the Energy Directorate at the Ministry of Energy and Mines (MEM), a total of 163 projects had been officially qualified to receive incentives under the decree as of November 2025.
Tax Incentives Available Under Decree 52-2003
The incentives granted by the law include exemptions from customs duties, value-added tax (VAT), and consular fees on the importation of machinery and equipment used exclusively for renewable energy projects. These benefits apply during the pre-investment and construction phases and can extend for a period of up to 10 years.
In addition, the regulation provides an exemption from income tax (ISR) for up to 10 years, starting from the date the project begins commercial operations.
To access these benefits, interested parties must submit an application to the MEM, through the General Directorate of Energy, in order to obtain official project qualification as a beneficiary of the fiscal incentives.
PEG-5: The Largest Power Generation Expansion in Guatemala
The PEG-5 tender foresees the contracting of between 1,400 and 1,500 megawatts (MW) of new electricity generation capacity. This scale creates significant opportunities for the integration of renewable technologies as well as energy storage systems, aligning with regional and global energy transition trends.
The combination of the incentives established under Decree 52-2003 and the PEG-5 bidding process is intended to create favorable conditions for investment, promote the adoption of new technologies, and expand Guatemala’s energy supply in a competitive and sustainable manner.
Key Dates and Market Outlook
The technical bid opening for the PEG-5 process is scheduled for February 12, 2026, marking a critical milestone for developers and investors evaluating participation in the tender.
Together, the incentives law and the PEG-5 expansion plan position Guatemala as a market with a structured regulatory framework and concrete mechanisms to support large-scale renewable energy investment, reinforcing the country’s strategy to diversify its energy matrix and ensure long-term supply security.
