Energy Sector

US power companies have expressed interest in investing in Honduras's energy sector following the September enactment of the Energy Justice Law, the government says.

Economist Ismael Zepeda criticized the government's new $177 million CAF loan for the energy sector, arguing it contradicts recent reforms meant to attract private investment and warning that the debt burden will fall on consumers rather than private utilities.

Under new rules, Honduras's ENEE must use public tenders rather than direct contracts for future power purchases, with the first bidding process required to launch within 180 days and conclude within a year.

Honduras's state power utility ENEE, losing an estimated 40 million lempiras daily to illegal connections, meter tampering, and theft, is launching specialized crews nationwide to inspect, install meters, and cut service where electricity theft is found, aiming to recover lost revenue and strengthen its financial position.

International banks and investors are showing interest in Honduras's electricity sector following approval of the Energy Justice Law, which establishes competitive bidding and auctions; the government estimates the sector needs about $6 billion in investment to modernize infrastructure and expand coverage.

Honduras's new Energy Justice Law, approved by Congress in August, has drawn interest from international financial institutions and investors who see it as a signal of transparent investment rules and modernization, with the government estimating the sector needs about $6 billion to upgrade infrastructure and expand coverage.

Energy Secretary Eduardo Oviedo said Honduras is drafting terms for a new electricity-generation auction split into two stages—one adding roughly 600 megawatts and a later phase potentially 1,000 megawatts—pending congressional approval of pending energy reforms; the sector will need about $6 billion in investment across generation, transmission, and distribution infrastructure.

A former ENEE manager estimates the state utility's planned split into generation, transmission, and distribution subsidiaries would require up to 30 months to implement and roughly eight years to reduce electrical losses to 15%.

Congressman Marco Tulio Rodríguez (Liberal Party) said electrical-sector reforms should include legislation against energy theft and require public bidding rather than direct contracts, arguing that will prevent inflated costs and rigged deals for Hondurans.

State institutions have accumulated over 20 billion lempiras (roughly $800 million) in unpaid electricity bills to ENEE, with much of the debt dating back more than 15 years; the utility is auditing its accounts receivable and also grappling with 34% energy losses due partly to theft.

Lawmakers are moving closer to agreement on reforms to Honduras's General Law of the Electrical Industry, with the Liberal Party and the legislative committee narrowing differences over how to attract private investment while keeping state assets under the control of the state-owned utility ENEE.

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.

Experts debated Honduras's urgent need for electricity-sector reform, warning that failure to reach consensus by July will worsen blackouts, increase public debt, and deter foreign investment, as lawmakers disagree over whether new utilities should remain state-owned or allow private investment.

Genesis Energy's natural-gas plant in Puerto Cortés, meant to supply fuel to utility Brassavola and replace diesel generation, has missed its original November 2024 deadline by nearly two years with five rescheduled start dates and minimal visible construction progress.

Honduras's Opportunity Electricity Market (MEO), created in 2019, is drawing fresh investment in power generation; by May 2026 it supplied 16.62% of national production through 39 plants, though faster payments to generators have increased Enee's purchase costs.

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.

Former ENEE chief Erick Tejada accused the current utility head of signaling a government drive to privatize Honduras's electricity sector, citing France, Costa Rica, and other nations as examples of successful public energy systems.

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.

A Libre congressman argues that collecting millions owed by large corporations to the state electricity utility ENEE would shore up its finances and make privatization unnecessary, and has called for public disclosure of the major delinquent accounts.

Former Energy Secretary Erick Tejada says Honduras's state power company needs eight years to recover from deep structural problems, and warns that the government's no-subsidy policy is pushing electricity rate increases onto ordinary Hondurans.

Renewable-energy generators say that once Congress approves planned reforms to Honduras's electricity sector, investment opportunities will expand significantly.

Congress President Tomás Zambrano said pending legislation to reform Honduras's state power utility aims to strengthen ENEE, reduce losses, and improve service—not privatize it—while the government spends over 16 billion lempiras annually to cover the company's deficits.

Honduras's state power utility is issuing bonds in the national financial system to raise liquidity and settle accumulated debts to electricity generators, officials say, aiming to ensure uninterrupted power supply.

The Inter-American Development Bank said it supports Honduras's energy reforms, which aim to fix structural problems in the electrical system and ensure long-term sustainability, and pledged to help with implementation.

Former energy official Guillermo Peña Panting warns that Honduras faces potential loss in international arbitrations filed by electricity-sector investors at the ICSID, citing the current administration's reforms to contracts signed under prior legal frameworks.

Honduras's state power utility ENEE requires L35.4 billion (roughly $1.4 billion USD) in domestic debt from 2026 to 2029 to cover payments to private generators, amid losses exceeding 34% and a total debt burden now at L73.3 billion.

Honduras's engineering college says a draft reform to the national electricity law could threaten sector stability by exempting state-owned subsidiaries from traditional asset controls and lacks binding mechanisms to address endemic technical and non-technical losses.

An energy analyst warns Honduras could face an unfavorable International Monetary Fund evaluation because state utility ENEE has failed to meet targets for reducing electricity distribution losses, a goal tied to the country's IMF program.

Carlos Hernández, director of the advocacy group ASJ, warns that the state power utility ENEE has received 46 billion lempiras over four years while carrying a debt exceeding 100 billion lempiras, and continues to suffer from high losses, unfocused subsidies, and electricity theft.

The ENEE's financial manager said new transmission infrastructure projects will be funded through private investment drawn by sector openness, not public debt alone, to accelerate Honduras's energy development.