The reform that promotes the splitting of the National Electric Energy Company (ENEE) is moving toward a decisive stage in the Honduran National Congress and is already generating conflicting opinions among some of the main market players. While business organizations consider it a necessary tool to stabilize the state-owned company's finances and modernize the electricity system, former officials and industry leaders question its scope and warn of regulatory risks.
The project, which has already passed two legislative debates and is awaiting final approval, seeks to deepen the technical, administrative and financial separation of ENEE, as well as enable new private investments in key segments of the electricity grid.
The differences do not revolve around the diagnosis. There is consensus on the complex situation facing the state-owned company. The disagreement arises when assessing whether the proposed reform will be able to correct the structural problems that have plagued the sector for years.
The financial situation of ENEE explains much of the support the initiative is receiving. The company has accumulated a debt exceeding USD 4.5 billion , equivalent to 11% of Honduras's Gross Domestic Product, while technical and non-technical losses approach 38%.
In that context, Eduardo Bennaton , president of the Honduran Renewable Energy Association (AHER), defined the discussion as "the most important decision that Honduras will make this decade in economic matters."
The leader maintained that the urgency to act was evident. He explained that the inefficiencies of the state-owned company represent a daily burden on public finances and ultimately impact the entire Honduran economy.
AHER supports the reform and believes that the public debate has focused excessively on the possibility of privatizing the company. Bennaton noted that the text currently under discussion includes provisions prohibiting the transfer of ownership, management, or physical assets of ENEE to private operators.
However, the renewable energy sector's support does not imply unconditional backing for the project. Before its final approval, the association is calling for technical adjustments to ensure effective implementation.
Among the observations raised are realistic timelines for completing the spin-off of the state-owned company, a truly independent Electric Energy Regulatory Commission (CREE), and the incorporation of tax incentives for renewable energy within the decree itself.
For Bennaton, the success of the reform will depend less on its legislative approval than on its subsequent implementation. "The real test will not be the approval of the decree, but the State's capacity to implement it. And that implementation depends on the law being well-crafted from the outset," he stated .
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The strongest criticisms come from those who believe that the initiative leaves the fundamental problems of the state-owned company unresolved.
Erick Tejada , former Minister of Energy of Honduras, recalled that the technical, administrative and financial separation of the ENEE did not arise with the current proposal, but began during the previous government with the support of the International Monetary Fund (IMF).
As he explained , the objective was to allow the generation and transmission sectors to have their own resources for investment. He also noted that correcting anomalies detected in the calculation of the Distribution Added Value (VAD) and the Transmission Added Value (VAT) will have consequences for electricity rates.
"There was an unregistered anomaly in the calculation of VAD and VAT that we regularized and which will be fully resolved this year; it will have an upward impact on the rate," he stated .
The former official also highlighted that the reform opens the door to greater participation of private investors in the development of network infrastructure.
Even so, he considered that the main challenge will be preserving the State's supervisory capacity over the electricity market. "The greatest risk, in my opinion, is regulatory capture that undermines the State's ability to oversee the electricity subsector and private market players," he warned .
From their perspective, the decree also fails to address the main causes that explain the state-owned company's financial situation.
"The Counter-Reform does not address the main problems of ENEE: financial debt, high generation costs and loss reduction," Tejada argued .
Doubts about private participation are also supported by past experiences. Other sources in the sector consulted recalled that Honduras had already attempted to incorporate foreign capital through outsourcing schemes for electricity distribution.
According to these reports, that experience ultimately worsened performance indicators due to insufficient state oversight. As a result, the expected outcomes were not achieved, and the costs were ultimately absorbed by public finances.
With the third legislative debate drawing ever closer, the reform is progressing amidst both expectations and questions. While some stakeholders consider it a historic opportunity to reorganize the Honduran electricity system, others believe the real test will begin once the law is passed and the institutional capacity to implement the planned changes is put to the test.