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Honduras's El Cajón hydroelectric dam will close 2026 at only 70.44% capacity (271.45 meters) due to below-average rainfall from the El Niño phenomenon, and power officials project a 70-megawatt output loss in 2027 as water levels fall further, straining the grid's backup reserves during peak-demand months.

The government froze electricity rates to prevent a 20% surge from power contracts signed by the previous administration, shielding household budgets and the economy while recent rainfall boosts hydroelectric generation.

Honduras's Cañaveral and Río Lindo hydroelectric plants, fed by Lake Yojoa through channels, tunnels, and pipes across a 400-meter elevation drop, generate power twice from the same water flow, producing a combined 109 megawatts and serving as a model of efficient cascade generation.

Former ENEE general manager Salomón Ordóñez warns that Honduras's largest hydroelectric reservoir has lost 50% of its generating capacity due to drought, with power-sector reform results expected in two to three years.

The electricity regulator warns Honduras risks power rationing next year unless it rapidly adds new generation capacity through competitive bidding, which it says—not tax breaks—will lower energy costs.

The Infrastructure Ministry officially took over the El Tablón multipurpose project from the national utility, which aims to generate electricity, supply water, and control flooding while ensuring continuity of technical, administrative, and contracting work.

Climate experts warn that El Niño strengthening could prolong the dry season (canícula) from its usual six weeks to 45–60 days, reducing rainfall by 40–60% and straining water supplies, agriculture, and hydroelectric power across Honduras, with Tegucigalpa's reservoirs at critical levels.

Honduras's largest power plant, El Cajón, which supplies about 30% of the nation's electricity, is at risk of forced shutdowns due to aging equipment past its useful life and delays in purchasing critical replacement parts, engineers warn.

A dispute over overlapping duties between the interim technical chief and the administrative director at Honduras's largest hydroelectric plant, El Cajón, is stalling procurement of vital parts needed to keep all four turbines running, according to internal communications obtained by El Heraldo.