The Inter-American Development Bank (IDB) has granted $150m loan to support national electric energy transmission program in Honduras in order to improve service quality and reduce power outages.


Image: Honduras seeks to reduce power outages and increase access to power. Photo courtesy of John Smith/

The loan will be used to finance works under the National Electricity Energy Company’s (ENEE) investment program.

IDB expects the loan to boost ENEE’s interconnectivity with the Regional Electricity Market (MER) to foster the use of the Electricity System of the Central American Countries (SIEPAC) as well as improve ENEE’s financial sustainability and institutional capability.

It is also expected to expand transmission quality by raising service reliability and increase transmission to the NTS of energy generated from renewable sources.

The program contributes to the Honduras Country Strategy for year 2015-2018 to diversify the generation matrix and increase access to the energy system.

The program aims to expand transmission system at national level, increase the volume of transactions at the regional electricity market, and raise power service coverage at national level.

In 2014, the country has launched a reform process, establishing an institutional structure that includes an Energy Secretariat in charge of strategic planning and energy policy formulation.

IDB said in a statement: “The reform also contributed to the sector’s financial recovery; enhanced private participation in energy distribution, reducing losses, which was one of the sector’s main challenges; raised Honduras ability to become actively involved in the MER, increasing energy purchases from 1.4% in 2013 to 3.7% in 2017, which has in turn cut generation costs; and helped launch international public tenders to purchase energy and thermal power.”

Separately, IDB has granted $100m funding to help Ecuador revamp, repower and improve the reliability of its electric system.

The loan will be used by the Government of Ecuador to implement projects to ensure service continuity which include technological measures. These measures aim to enhance the system’s digitalization and promote its integrated management.

Additionally, the loan will be used to fund projects to boost environmental waste management capabilities and for institutional strengthening to improve energy prospecting and analysis.