Energy Reform

Congress is moving toward approving a structural reform that would divide the state-owned ENEE into three separate commercial entities for generation, transmission, and distribution, with energy experts warning the changes open a path to privatization and could weaken the utility's financial stability.

The World Bank recommended splitting Honduras's state power utility ENEE into three separate units for generation, transmission, and distribution in 2007, but the government did not act; losses have since grown from 25% to 38% of revenue, and experts say the breakup is now urgent.

A proposal by the current director of Honduras's state electricity utility to reorganize its structure into three separate companies and create an independent grid operator would undermine state control and pave the way for privatization, according to former ENEE manager Erick Tejada.

President Nasry Asfura said his administration will not privatize the state power utility ENEE but will pursue efficiency reforms and modernization to address the company's mounting losses, which he called Honduras's main economic problem.

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.

Congress is advancing a reform of Honduras's electricity sector that would reduce technical and non-technical losses—now running at 38% of the system, or about 1.3 billion lempiras monthly—and strengthen regulatory oversight to improve efficiency and financial sustainability.

The government is pursuing an electrical-system reform that would restructure the national utility company (ENEE) into separate generation, transmission, and distribution units to reduce annual losses exceeding 16 billion lempiras and free resources for health, education, and infrastructure.

President Asfura introduced a bill to modernize ENEE, Honduras's state electric company, through operational restructuring aimed at recovering more than 16 billion lempiras annually in system losses that could be redirected to health, education, roads, and social programs.

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.