Empresa Energรญa Honduras loss-reduction partnership, and its reversal
Honduras's state utility ENEE awarded Empresa Energรญa Honduras a public-private partnership contract in December 2015, with service starting in 2016, to run national distribution and cut technical and non-technical losses by 17%. Distribution losses fell from 33.38% to 27.11% by February 2018, rose to 35.37% by December 2020 and stood at 30.77% in December 2021. The state intervened the contract and took distribution back when it ended in August 2023.
30.77 % of energy, electricity distribution losses, december 2021 (technical and non-technical), 2021-12. 27.11 % of energy, lowest distribution losses under the partnership (february 2018), the gain that was lost, 2018-02. Secretarรญa de Energรญa de Honduras, Direcciรณn General de Electricidad y Mercados, Informe Estadรญstico Anual del Subsector Elรฉctrico Nacional 2021 (Tabla 11, from ENEE Subgerencia de Planificaciรณn y Gestiรณn Comercial), retrieved 2026-10-01.
The move, and what it needed
ENEE, through a Congress-approved PPP trust supervised by SAPP and an external supervisor, handed national distribution and loss recovery to a private operator paid from distribution revenue. When losses rose, the state intervened the contract and then let it lapse, moving loss recovery into its own Programa Nacional para la Reducciรณn de Pรฉrdidas.
Preconditions
- A loss baseline and metering both parties accept, so the operator can be paid for points recovered rather than for presence
- A regulator and supervisor able to enforce loss targets during the term, not only at expiry
- Political tolerance for disconnecting non-paying users and prosecuting theft, which is where non-technical losses are recovered
Where else it has been used: Loss-reduction management contracts are a common utility reform. This case shows the first two years of gains disappearing once enforcement weakened, and a government that ended up reabsorbing the function it had contracted out.
Limits: The loss series is ENEE's own commercial accounting, republished by the Energy Secretariat under the government that intervened the contract and campaigned against it, so the source is not neutral. The table stops in December 2021. The 2022 and 2023 values, including the roughly 37 to 38 percent widely reported when the contract ended, appear only in press coverage, and this record does not carry them. The SEN text does not attribute the 2016 to 2018 fall to EEH by name. The 2020 rise coincides with COVID-19 lockdowns and hurricanes Eta and Iota, so not all of the reversal can be laid on the operator. The contract was intervened and then expired at the end of its term in August 2023. It was not cancelled outright, and 'dismantled' here means the partnership model ended and ENEE took distribution back, not that a court annulled it. The SAPP fact sheet has copy errors: a malformed start date, and a repayment source copied from an airport sheet ('COBROS POR SERVICIOS AEROPORTUARIOS'). The 17% target comes from SAPP's project description, not from the contract text. A loss percentage measures the outcome of the partnership and says nothing directly about how deep the collaboration was. It is evidence that a structured government-firm arrangement on a national goal was tried at national scale and failed, not a measure of collaboration.