Shortage of Electricity on Costa Rican Pacific Coast

The Pacific coast of Costa Rica has witnessed rapid tourism growth in the past 5 years, so much so that coastal villages like Playa del Coco cannot handle the influx of tourists especially during peak times.

Five years ago tourists, particularly from Canada and the United States purchased small condos and lofts for as low as $35,000- only minutes from the ocean. Today those same properties are listed for sale at $75,000 and more, effectively doubling the original sale prices.

We were offered a two-bedroom condo in a three-year-old building for $125,000, complete with courtyard swimming pool and 24-hour security service. Purchase price three years ago we found out was approximately $35,000!

Price increases like this illustrate the snowball effect of rapid speculation, and the desire of many to produce a profit by simply buying a property and waiting for it to appreciate in value.

The Playa del Coco area has been built on speculation and lots of it. There are huge numbers of absentee landlords, just sitting on their investments. “FOR SALE” signs are everywhere, and even more new and bigger condos are being built.

As previous articles to this website have suggested, a certain amount of growth is good for tourism development and good for Costa Rica, but one of the drawbacks is that the local infrastructure was not built to handle the demand. Nor was the electricity grid built to sustain perhaps a 100% increase in the actual number of buildings in Playa del Coco since 2003.

It is not surprising that big multinationals like Pacifico basically come in to a community with a turnkey package. They build their owned paved roads to get to their properties. They build huge underground tanks that contain enough water to supply their condo developments, and they have their own generators to supply electricity when the grid is down. You can get what you want if you have the money and are willing to pay for it. These units aren’t cheap. Start at $250,000 and work your way up.

Meanwhile, the middle class and working class people rely on the local power grid and that’s where there’s a big problem. On the lead-up to the 2008 New Year, when the area was swarming with tourists, mostly Costa Rican vacationers, power outages occurred on 3 consecutive days during the supper hour and into the evening. Of course, without electricity there was no water either. Even when the electricity is turned back on, the water pressure is often low and inconsistent. It makes life very inconvenient and it is difficult to plan anything without these essential utilities.

A bit of delving into the electricity problem in Playa del Coco turned up some interesting information. Apparently, ICE, the Costa Rican utilities company supplies electricity to the areas of Costa Rica EXCEPT the Pacific coastal area where one visiting Costa Rican told me “that the grid was so poorly designed along the Pacific coast that ICE refused to take it over, and that a private, Nicaraguan company supplies electricity to the antiquated power grid here.”

If that statement is mostly true, and I suspect it is, the real estate companies better start coming clean with ALL of the information about this area when they sell property to potential buyers visiting Costa Rica. From what I know about Nicaraguan electricity problems and their almost daily power outages and generators on every city block, I don’t think Costa Rica really wants to follow Nicaragua’s direction.

More importantly, the government of Costa Rica has an important and vital responsibility to ensure that builders adequately compensate the growing municipalities for improvements required in the local infrastructure to deal with the influx of people. It is unfair for developers to increase the load on the electrical grid and the water supply delivery systems, without ensuring that the local people have reliable services.

To ignore this problem, to bury one’s head in the sand is not an option. Haphazard development is plainly evident here, and without the necessary controls and property tax increases, the reputation of the area will gradually decline and that would be very unfortunate indeed.

Playa del Coco, and other similar communities along the Costa Rican Pacific are wonderful holiday destinations, but the time has come for the government to step in and make sure that the development outcomes serve all of the people, not just the wealthy who can afford to buy properties from Pacifico and other multinationals.