Honduras courts Chinese to help shore up power sector

Honduras’ state power company Enee signed an agreement with PowerChina during a visit by Enee head Erick Tejada Carbajal to the Asian giant.

The deal covers final works for the 104MW Patuca III hydro, the finalization of feasibility studies for Patuca II A (150MW), and a study of the Central American country’s entire power system and development of schemes to strengthen it, Tejada announced on social media.

Enee also inked a deal with Chinese firm Windey Energy Technology Group which will conduct an in-depth study of Honduras’ wind power potential.

The visit included a meeting with Industrial and Commercial Bank of China and Export-Import Bank of China to discuss financing for hydro projects Los Llanitos, Morolica III and Patuca II A and the restructuring of bank debt which represents an annual interest payment of 6bn lempiras (US$238mn).

Interaction between the two countries has grown after President Xiomara Castro reestablished relations last year and opened an embassy in Beijing.

Also read Potential for Honduras solar capacity to jump over 50% with Chinese project

In recent days, the IMF concluded a visit to Honduras, highlighting the “improved health of the energy sector.”

“The team was encouraged by the recent downward trend in electricity losses by the public power company Enee. That said, it was agreed that continued reforms will be vital to underpin Enee’s financial health. In the short run, the authorities agreed that reducing Enee’s payment arrears through domestic bond issuances and enhancing coordination across relevant official stakeholders to tackle Enee’s challenges are a priority,” the multilateral said.

“These measures are also essential to attract needed investment to expand generation capacity and guarantee adequate provision of energy. In parallel, the authorities committed to continue other structural reforms, including integration of Enee’s three distribution units and upgrading of its financial accounting to international standards.”