What is the solution to the energy Crisis?
The Honduran people and companies, at all levels, are affected daily by the consequences of the precarious energy situation in the country. Users are annoyed because of the high charges, while in the rural area and in the cities far from the marked line of development, it increases due to the blackouts those affected by the residents for hours and days with manifest frustration.
Entrepreneurs also pay the bill at a high price, not only because of the high costs, but some must close their businesses due to losses because of the constant rationing, especially in the interior of the country where poverty and lack of employment are exacerbated. A nation in the dark will live forever in underdevelopment.
Energy represents a source of economic growth, as recognized by the recent publication: “The Countries in Focus” of the International Monetary Fund, where the conditions are presented by the body before the approval of a new economic agreement “The New Economic Plan of Honduras for Stability and Growth ”
“The deterioration of the financial situation of the state electricity company has caused tensions in public finances. This happens in an environment in which poverty is still considerable, and with strong needs for social spending and infrastructure. In addition, a general difficulty in achieving inclusive sustainable growth is the need to improve government management, which requires wide-ranging institutional reforms, “said Esteban Vesperoni, Head of Mission of the IMF for Honduras.
Work to execute
Within the new economic plan there are three sections that represent the basis of the measures to be taken, including: “Strengthening the fiscal situation, for which the state electricity company will be placed on a sustainable path through reforms in the electricity sector and with measures to maintain a margin in the budget for investment and social spending”.
This measure turns the light on the road not only for the general population, its impact is directly for companies, investors, job creation, technological development, health, among others.
The institutional strengthening of the Ministry of Energy, the Regulatory Commission for Electric Energy (CREE), as well as the System Operator (ODS), are the pillars for the new electricity system.
The new leadership in the National Electric Energy Company (ENEE) is expected to allow a dynamic transition to turn it into a Government Holding Company, which integrates the three state companies; one for generation, one for transmission and one for distribution. These changes, accompanied by the promotion of the Electricity Industry Law, improve the degree of certainty for investment and open up opportunities for the development of new projects in the electricity sector.
The National Investment Council (CNI) accompanies, supports and promotes the reforms required by the process of this new development plan, since one of its pillars highlights “Implementing reforms to improve the business climate and government management …”.
Transformation = Growth
With these reforms to implement, the CNI considers that the future of investment in Honduras is positive. Stimulating economic growth through transformations in the energy markets responds to the recommendations of organizations such as the International Energy Agency, which encourages developing countries to carry out institutional reforms.
Good governance in the energy sector is critical to attract investment in infrastructure. Effective competitive markets give consumers a choice and push costs down.
The International Energy Agency has insisted on the fact that investments in energy infrastructure, which need huge sums of money, are essential to eliminate poverty.
Another important aspect of the Energy Sector is its potential to generate employment, according to recent statements by AHER, in a media outlet.
A national newspaper published that clean energy projects have allowed the generation of some 16,000 direct jobs and some 30,000 indirect jobs in rural and remote areas, where there are no other sources of employment. That is the goal of Honduras within its economic plan, to promote its reform program and promote inclusive growth.
On the other hand, the IMF stands out as part of the agreement, establishing changes that lead to fighting corruption and strengthening government management, facilitating processes that minimize corruption circumstances. “Authorities are also working with IMF staff and other development partners to execute reforms to shore up the rule of law, to prevent embezzlement of public funds and to improve the business climate; in particular, by simplifying public administration procedures in order to reduce red tape and discretion, which can lead to corruption, “said Esteban Vesperoni, Head of Mission of the IMF for Honduras.
Written for CNI.