TEGUCIGALPA Jan 20 Honduras' Congress on Monday
approved a breakup of the country's state-controlled electricity
producer, allowing private interests to invest in the
semi-shuttered industry in an effort to stem the company's
losses and revitalize the ailing sector.
ENEE, as the company is known, currently generates
electricity and also buys from independent producers. But the
state-subsidized firm has faced losses of roughly $200 million a
year, preventing it from investing in new projects.
"This legislation allows the participation of private actors
in all of the electricity market to drive investment in the
sector and respond to the demand for electricity that is key to
the development of this country," Emil Hawit, ENEE's director,
Under the terms of the legislation, backed by 95 of the
country's 128 lawmakers, ENEE will be broken into three separate
companies - for generation, transmission and distribution -
which will be open to private investors.
It was not immediately clear how much would be opened up,
but the government would maintain a minority stake. The breakup
must occur by July 1, 2015, at the latest, under the
Preliminary figures showed Honduras ended 2013 with a fiscal
deficit of nearly 8 percent of its gross domestic product (GDP),
and many analysts had expected the government to partly
privatize the loss-making ENEE to help close that gap.
Last week, Honduras' Congress approved a 2014 budget that
seeks to nearly halve the deficit, bringing it down to 4.7
percent of GDP by the end of this year.
Until now, private investors have only been allowed to
produce electricity that they must then sell back to ENEE.
The company produces just over 400 megawatts a year through
its hydroelectric and geothermal plants, with the rest of the
country's energy needs footed by independent producers.