Colombia and Panama will invest $420 million to construct a power line that will start in the northern region of the Andean nation and could eventually connect with all of Central America, the energy and mines minister in Bogota said Monday.

The project will be financed in equal parts by the two countries, Carlos Rodado said in an interview with Caracol Radio and Television.

Rodado said that the accord was formalized last Friday in Panama City together with Panamanian Finance Minister Alberto Vallarino, the president of the Colombian state utility ISA, Luis Fernando Alarcon, and the Panamanian utility Etesa.

ISA will contribute 50 percent of the funding for the project, while the Panamanian government will pay Etesa's quota.

Thus "the financial aspect is concluded and the line now becomes a genuine commitment," Rodado said in explaining that Panama and, in the future, other Central American countries, will be able to receive surplus hydropower from Colombia.

The 14,000 MW line should go into service by 2014, strung along the Caribbean coast between one country and the other, Rodado said.

The Colombia-Panama power line is part of a project that has been under consideration for several years by ISA, the leading transmitter of electricity in Colombia and one that has expanded its activities to several Central and South American countries, including Bolivia, Brazil and Peru.