The government of Honduras announced it will sell up to US$750 million in global bonds, its first such debt issue, to fund hydroelectric projects and bail out a struggling state power company.
Defense Minister Aristides Mejia, who oversees a government hydroelectric fund with the country’s finance minister, said June 14 the sale would range between US$500 million and US$750 million.
The bonds would be issued between July and August this year, with the revenue to finance hydroelectric projects and help rescue crippled state electricity monopoly Empresa Nacional de Energia Electrica (ENEE), he said.
“The bonds will be sold in international markets,� Mejia said. �We will use the new cash to push ahead with rescuing ENEE.”
Mejia would not say which investment banks would handle the sale or give details of a planned maturity or expected yield.
Honduras President Manuel Zelaya said in February he would become directly involved in administration of ENEE to help it reduce losses and avoid bankruptcy. (HNN 2/22/07) ENEE, which has US$2.2 billion in assets including hydroelectric projects, distribution networks, and other facilities, has subsisted for more than two decades on government subsidies.
The monopoly utility is the poor nation’s largest company, employing 2,800 people. It produced 1,065 MW in 2006. Demand is estimated to be increasing by 100 MW per year.
The president launched a campaign to reduce energy theft by customers, industrial as well as residential, estimated at US$148 million annually. He also intends to renegotiate or break contracts with private thermal power producers and to initiate payments for power used by government agencies. Government offices have not been paying for power for more than a decade.