Electricity Crisis

Honduras's newly approved Energy Justice Law, passed by Congress on August 31 with 78 votes, has not yet been published in the official gazette and cannot take effect until the President signs or vetoes it; business groups say swift implementation is critical to address the country's electricity crisis.

Recent blackouts stem from multiple power plants not yet connected to the grid, a former ENEE manager said, while warning that extreme heat from a climate pattern called Super Niño and potential water shortages next year could worsen the energy crisis unless idle thermal and renewable units are brought online.

Honduras suffers over 165 hours of blackouts yearly—versus fewer than 9 in El Salvador—costing businesses more than $100 million annually, and analysts warn the new Energy Justice Law's impact depends on institutional capacity to implement it.

Vice President María Antonieta Mejía has called on lawmakers to hold a technical debate on proposed reforms to the state-run electricity company ENEE, which faces losses of about 16 billion lempiras (roughly $640 million) and is hampering public investment in education and infrastructure.

Salomón Ordóñez, the former head of state utility ENEE, says Honduras faces losing competitiveness in Central America unless it tackles two decades of governance failures in its electricity system, citing Guatemala and El Salvador's successful power-sector overhauls.

Congress is prepared to review the executive's proposal to restructure the state electricity utility ENEE to reduce its 38% loss rate—which costs the state approximately L1.3 billion monthly—and lower electricity costs for consumers.

The government will submit a comprehensive electricity-sector reform bill to Congress this week that would split ENEE into three functional divisions—generation, transmission, and distribution—aiming to cut system losses of nearly 38% and stabilize tariffs, officials say.