Electricity Reform

President Nasry Asfura called on lawmakers to pass reforms to the Electricity Sector Law to address the state power utility ENEE's monthly losses of approximately 1.2 billion lempiras (about $48 million), which he said strain the government's capacity to fund health, education, and infrastructure.

Honduras's power utility ENEE loses more than L17 billion (about $680 million) annually to technical inefficiencies and electricity theft, representing 35% of total output; Congress is advancing reforms to reorganize ENEE into subsidiary units for generation, transmission, and distribution, strengthen the regulatory commission, and establish an independent market operator.

The Liberal Party's congressional delegation will present next week an alternative to the governing party's proposed reforms to the electricity sector, focusing on two disputed articles while seeking to rescue the state utility without privatization.

Congressman Arnold Burgos says the government lacks 13 votes from the opposition Liberal Party to pass reforms to Honduras's electricity sector, while denying plans to privatize the state utility ENEE.

The head of Honduras's business association warns that the state power utility ENEE has 122 billion lempiras ($4.9 billion) in liabilities against 54 billion in assets, and risks having to return to costly diesel generation unless Congress approves new energy legislation and competitive bidding within months.

Congresswoman Marixa Julín (PINU-SD) said Honduras's power crisis demands reform, noting that companies owe the state power utility nearly 20 billion lempiras ($800 million) and that outdated contracts dating to the 1990s energy crisis must be renegotiated to protect consumers and reduce losses.

The organization Sendas warned that Honduras's planned electricity-sector reform needs a dedicated, autonomous administrator with real decision-making power to implement structural changes, noting that fragmented responsibility across multiple agencies and weak institutional continuity have hindered past efforts.

Congress began debate on sweeping reforms to Honduras's electric utility ENEE, aiming to reshape its corporate structure and finances to address the state company's L50 million daily fiscal deficit before lawmakers begin mid-year recess.

A Fosdeh economist argues that measures now being negotiated to stabilize Honduras's state electric utility must become permanent policy to prevent future administrations from reversing reforms, as has happened repeatedly.