The Malaysia External Trade Development Corporation (Matrade) is encouraging Malaysian solar energy providers to explore opportunities to export solar products and services or establish joint ventures in Panama.
It advised Malaysian companies to leverage on opportunities arising from the recent introduction of a law that promoted solar energy in Panama.
In June 2013, the Legislative Assembly of Panama approved a new law that provided incentives for the construction, operation and maintenance of solar plants or solar facilities in the country with incentives such as exemption from income tax, duties, levies and contributions.
Among other incentives are sales tax for the importation and purchase of equipment and material and a tax credit on payable income tax for a maximum of five per cent of the total direct investment on infrastructure such as highways, roads, bridges, schools and health centres.
Products eligible to enjoy customs exemption include solar water heaters or heat producing equipment, parts and components required to assemble the solar collectors for water heater or solar drying equipment, solar panels and individual solar cells, stationary accumulators of long duration, inverters and solar converters; and accessories, equipment, software and other items that are related to the use and development of solar energy, Matrade said in a statement.
Matrade quoted the Panama Ministry of Energy as saying that 55 per cent of electricity generation in the country came from hydropower while the other 40 per cent were from thermal energy such as bunker fuel, diesel and coal.
In May 2013, Panama experienced an acute power shortage due to the limited rainfall received that affected the water level of key dams producing electricity.
Malaysian Trade Commissioner in Mexico Remee Yaakub said the establishment of the incentives regime would further generate interest among industry players to undertake activities related to solar energy and this would translate into an increase demand for such products.
“On-going trade promotional activities in Panama by Matrade office in Mexico have created interest to source products related to solar energy and with this new law, interests are expected to escalate.
“In view of the intense competition from many suppliers, both regional and global, Malaysian companies with intention to penetrate into the Panama market are advised to undertake aggressive promotions including visits to the market,” he said.
Malaysian companies can contact Matrade Mexico to obtain further information on the new incentive regime on solar energy.