US Backs Honduras Energy Reform as Liberal Deputies Split on Bill
Central America · ECONOMY
Key Facts
- —Diplomacy US chargée Colleen Hoey met Congress president Tomás Zambrano on 19 August to back the Honduras energy reform
- —The bill reorganise state utility ENEE and open the door to private investment while keeping assets state-owned
- —The split Liberal deputy Francis Cabrera says his bench will not back the current text; a counterproposal is due within days
- —The hole ENEE ran a deficit of 11.2 billion lempiras (about US$417 million) in the first half of 2026, according to watchdog ASJ
- —The stakes the utility loses roughly US$600 million a year, the biggest single drain on the national budget
Washington wants a modernised power sector; the Liberal bench wants a different bill. ENEE’s deficit is not waiting.
The United States has reaffirmed its support for the Honduras energy reform in a meeting between the US embassy’s chargée d’affaires, Colleen A. Hoey, and Congress president Tomás Zambrano in Tegucigalpa, even as the bill remains stuck in the legislature. The Liberal Party bench, whose votes the congressional board needs, has raised objections to the current text and plans to table a counterproposal, deepening a split that has stalled the overhaul of state electricity company ENEE since June.
Washington reaffirms its backing
The meeting between Hoey and Zambrano, reported by Tegucigalpa daily El Mundo, put energy-sector modernisation at the top of the bilateral agenda. During the encounter, the United States reaffirmed its commitment to keep working with Honduras towards a more efficient and reliable energy system capable of attracting investment, and stressed that a stronger sector would contribute to the prosperity of the country and the region.
Washington has publicly endorsed the Honduras energy reform since June, when the executive sent the bill to Congress and it cleared its first two debates. The diplomatic push comes as the government of President Nasry Asfura tries to deliver the overhaul before the end of the year, and as multilateral lenders, including the World Bank and the Inter-American Development Bank, keep technical and financial support on the table.
The timing is not accidental. The legislature’s board hopes to bring the bill to its third and final debate in the coming weeks, and US encouragement is aimed at holding together a coalition that looks increasingly fragile.
Liberal deputies split over the text
That coalition now runs through the Liberal Party. The board of Congress is courting the Liberal bench to approve the decree, but the caucus has expressed reservations about the original document and remains unconvinced. Deputy Francis Cabrera has said his bloc will not accompany the Honduras energy reform in its current terms, and the Liberals are expected to present an improved counterproposal within days.
The counterproposal has been weeks in the making. La Prensa reported in late July that the Liberal bench would condition its support on acceptance of its own draft amendments, and El Mundo reported in early August that deputies were urging the party to table the document quickly. The legislature’s leadership says it expects the counterproposal as soon as possible, opening a new negotiation round over the future of the bill.
The split matters because the numbers in Congress are tight. Without the Liberals, the government lacks the votes to pass the Honduras energy reform in its current form, and further delay feeds uncertainty for investors who have watched the bill stall since mid-June.
What the overhaul would change at ENEE
The reform would reorganise the Empresa Nacional de Energía Eléctrica, separating generation, transmission and distribution into distinct units while keeping the company under state ownership. Regulator CREE has published a final draft incorporating input from unions, business groups COHEP and ANDI, engineers’ associations, renewable-energy group AHER and civil-society watchdog ASJ. On the most sensitive point, the sale or privatisation of assets, the final bill would raise protection to constitutional rank: any change to the public nature of ENEE’s assets, holdings or shares would require congressional approval.
The financial case is stark. According to ASJ, ENEE posted a deficit of 11.2 billion lempiras, about US$417 million, in the first half of 2026 alone, as energy-sales revenue covered only 65 per cent of its expenses. Annual losses run to roughly US$600 million, the largest single hole in the national budget.
Technical work is already moving. ENEE has awarded a five-month contract to Colombia’s Consorcio Oportunidad Estratégica-Diorama Group to prepare a financial and operational sustainability plan, part of a national transmission-support programme financed by the IDB. The consortium was one of 15 groups that expressed interest, according to BNamericas, which reported the award on 14 August.
What to watch next
The immediate variable is the Liberal counterproposal. If its text narrows the gap with the government draft, the third debate could be scheduled in September; if it hardens positions, the Honduras energy reform could drift towards year-end with ENEE’s deficit compounding.
Investors are pricing the outcome. The government argues the reform will cut losses, improve service quality and set clearer rules for private capital in generation and distribution. Washington’s public backing, restated in Tegucigalpa this month, raises the diplomatic cost of failure, but the votes that matter are still inside the Honduran Congress.
Frequently Asked Questions
What did the United States say about the Honduras energy reform?
Chargee d’affaires Colleen A. Hoey told Congress president Tomás Zambrano that the United States remains committed to helping Honduras build a more efficient, reliable energy system that attracts investment, reaffirming support expressed since June.
Why are Liberal deputies blocking the bill?
The Liberal bench objects to the current text and, in the words of deputy Francis Cabrera, will not accompany the reform as drafted. The caucus plans to present a counterproposal, which the congressional board expects within days.
How bad are ENEE’s finances?
Watchdog ASJ puts ENEE’s first-half 2026 deficit at 11.2 billion lempiras, about US$417 million, with energy sales covering just 65 per cent of expenses. Annual losses approach US$600 million, the biggest single drain on the budget.
Connected Coverage
Honduras Bets on an Energy Reform to Stop a $600 Million Yearly Drain
Sources
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