Caribbean & Central America - October 2026

Honduras’ President Nasry Asfura has succeeded in pushing through a reform to shake up the country’s troubled energy sector, but only after accepting a number of changes to the original bill in order to garner sufficient support among lawmakers. 

The reform was passed on 31 August after 29 opposition legislators joined 49 from Asfura’s right-wing Partido Nacional (PN) in voting in favour, following around three months of negotiations after the original bill was submitted in May. Known as the Ley de Justicia Energética, the new law, which Asfura sanctioned on 29 September, contains 37 articles which amend the Ley General de la Industria Eléctrica and the law governing the constitution of troubled state power company Empresa Nacional de Energía Eléctrica (Enee).

The main changes include a temporary freeze of electricity prices for six months; the reorganisation of the Enee into three subsidiaries to manage generation, transmission and distribution separately; the creation of a new independent operator, the Operador del Sistema y del Mercado (OSM), to manage the electricity system and the market; and changes to the rules governing the buying and selling of energy. 

Asfura, who took office in January, made the reform one of his flagship legislative proposals, aiming to overhaul the sector as Enee continues to suffer significant financial and energy losses despite repeated attempts to shore up operations under successive governments. His original bill sparked concerns over the privatisation of the sector, but the adoption of the centrist Partido Liberal’s amendments meant that the law received enough support to pass.

Chief among those changes were assurances that Enee would remain in state hands, which PN lawmaker Marco Midence underlined following the passage of the reform. “The Enee will remain public and cannot be privatised or sold off,” he said following the vote. However, opposition lawmaker Hugo Noé Pino, of the left-wing opposition Partido Libertad y Refundación (Libre) party, said that the reform could still allow Enee to be privatised because the new legal entities are governed by the country’s commercial code and not as public entities.  “Privatisation is not just about who owns shares in Enee or its assets, it’s also about the privatisation of [regulator] Cree and the operator (OSM),” he added. 

Despite generating political controversy among lawmakers, the reform has received significant support from civil society and internationally. Honduran NGO Asociación para una Sociedad más Justa (ASJ), the local chapter of anti-corruption NGO Transparency International, said that the reform was a positive step following decades of growing problems at Enee, but warned that it should be considered the start of a process. “This is not the goal, it’s a starting point,” the organisation said in a statement published 1 September.

Key to turning the sector around will be attracting investment to shore up creaking infrastructure, and Honduran officials have already been talking up the potential effects of the reform. Enee manager Guillermo Peña Panting has also emphasised the potential boost to investment, claiming that the reform sends “a very strong message” to investors because the rules governing the sector are now clearer. And Asfura himself used his speech at the United Nations General Assembly in New York on 23 September to assure investors that “Honduras is renewing itself,” promising to improve the business climate to attract foreign direct investment in strategic sectors such as energy, infrastructure and mining. 

Investment interest

Juan Pablo Segura, the US Assistant Secretary of State for Western Hemisphere Affairs, also welcomed the reform in a social media post on 3 September. “Modern energy sectors open the door for US companies to bring capital, technology, and jobs, making our hemisphere more prosperous. A reliable energy sector makes Honduras a smarter bet for American investment,” he wrote.