The Interamerican Cooperative Service for Economical Foment (SCIFE in spanish) is created as a dependency of the Institute Of Economical Foment, by a mutual arrangement between the governments of Panama and the United States of America.
SCIFE had the purpose of investigate and evaluate the hydroelectric potential of the country.

Consulters are hired for the elaboration of recommendations for the development of the hydraulic resources and to study the electrification problem of the central provinces, which were served by three electrical companies: la Panamá Eléctrica, la Cía. Eléctrica del Interior, S.A. y Santiago Eléctrica, S.A.

On January 31st is created, by Law number 37, the Institute of Hydraulic Resources and Electrification (IRHE in spanish), with 300 employees, to expand and coordinate the needed electrical power facilities to provide an adecuate and reliable supply for the country; besides, it covered the gas and communication services.

Starting from September 16th, IRHE took over the operation and maintenance of the plants and electrical facilities in the central provinces and other regions of the country, among these Compañía Panamá Eléctrica, S.A and Compañía Eléctrica del Interior.

By Official Cabinet Decree number 235 of July 30th its constituted the IRHE as a autonomous organism equipped with its own assets and the ability to promote the development of electrical energy on the Republic of Panama.

The National Company of Force and Light is nationalized, which attended the electrical service in the cities of Panama and Colon. This company relied with the installed capacity of 84 MW that represented the 37.2% of the total for the Republic to the date.

On June the 1st, the national government acquired all assets, services and facilities from the National Company of Force and Light and another 1,300 employees are integrated to the institution.

The Santiago Electrical Company and the Chiriqui Electrical Companies are incorporated to IRHE, which used to operate in the city of Santiago of Veraguas and the province of Chiriqui respectively, with a total installed capacity of 1MW in Santiago and 24 MW in Chiriqui. Other 721 employees are incorporated to the institution.

It's created the National Institute of Telecommunications (INTEL) and the services of communications and telephony where separated from IRHE.

Compañía Hidroeléctrica del Valle, S.A. is incorporated to IRHE, with an installed capacity of 0.6 MW. They provided service to the Cocle province.

The Ascanio Villalaz Hydroelectric (Bayano) starts operation, which is located in the Chepo district, Panama province, with 150 MW of installed capacity. Its approximate construction cost is 104.2 million dollars.

It’s inaugurated the Integrated System Operation Center (COPSI), whose function is the supervision and control of the integrated electrical system, to optimize the generation and exchange of energy with other electrical systems (Like the Panama Canal Commission and other Central American countries).

The hydroelectric plants of La Estrella and Los Valles start operations, located in the Chiriqui province, with 42 and 48 MW of installed capacity respectively, and an investment of 99.3 million dollars.

The National Electric System integrates. This happened with the installation of 943 230KV transmission towers that travel from the Panama Substation in the Panama province to the Mata de Nance Substation in the Chiriqui province, with an approximate cost of 35 million dollars.

Units 1 and 2 of the Panama Substation started operation (Gas turbine) with an installed capacity of 21.4 MW each, located in the Panama province, with an approximate cost of 9.3 million dollars.

The Edwin Fabrega (Fortuna) Hydroelectric plant is inaugurated, located in the Chiriqui province, with 300 MW of installed capacity and an approximate cost of 532 million dollars, making it the biggest hydraulic plant in the our country.

The interconnection works between Panama and Costa Rica are concluded, through a 230 KV line between the substations of Rio Claro in Costa Rica and Progreso in Panama.

IRHE subscribes an Electric Energy Interchange agreement with the Republic of Honduras.

Two thermal plants start operation, John Brown, in the Bahia las Minas Central, located in the Colon province, with 30 MW of installed capacity in each one of them and a total cost of 33.0 million dollars.

The Monte Esperanza central started operation with 20 MW of installed capacity, after going through a rehabilitation process with an approximate cost of 2.0 million dollars.

Law 6 of February the 3rd 1997 gets approved, by which gets dictated the Regulatory and Institutional Mark for the Provision of the Electricity Public Service. The regime to which will be subdued the activities of generation, transmission, distribution and commercialization of electric power is established.

ETESA gets constituted on January 22nd, formally registering in the Public Register our Social Pact, giving birth to our legal life.

On May 27, ETESA begins their commercial operations, in virtue of the respective type A commercial license issuance, by the name of ETESA, identified by the number 1998-2742.