Progress in the energy sector in Honduras
A delegation from the International Monetary Fund (IMF) recently visited Honduras to evaluate the state of the country’s energy sector. During the visit, they focused on reviewing tariff schedules and the bidding process for 1,500 MW, key elements aimed at improving energy infrastructure and the financial situation of the National Electric Energy Company (ENEE).
The Electric Energy Regulatory Commission (CREE) shared with the IMF the progress made in tariff regulation. Additionally, CREE explained that a final tariff for the distribution sector is expected to be issued by the end of 2025.
Bidding for 1,500 MW and challenges for ENEE
The bidding process for 1,500 MW will be carried out under the Build-Operate-Transfer (BOT) model. This model involves investors financing the construction of power plants for 15 years before transferring them to ENEE. Although there are challenges, such as ENEE’s financial problems and uncertainty regarding the recovery of investments, the IMF expressed interest in the progress of this process, which presents an opportunity to attract investments to the sector.
Improvements in ENEE’s financial health
The IMF highlighted the progress made in reducing electricity losses by ENEE. However, they stressed the need to continue with structural reforms, such as reducing payment arrears through bond issuance and improving coordination between government entities.
Commitments and next steps
Throughout the mission, both the IMF and Honduran authorities agreed to continue advancing the necessary reforms to improve the financial health of the energy sector. The economic policies related to these advances must be approved by the IMF’s Executive Board, which will allow the continuation of the financing agreement process to support the national budget.
Vanessa Oquelí
vanessa.oqueli@garciabodan.com
Managing Partner
García & Bodán
Honduras