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thecountry’sannualgrossdomesticproduct. GDPcould witness zero growth or even contract in 1999 according to IMF officials. Preliminary assessments conducted by the IDB found that the damage to the electricity sector in the region has been minor compared to the damage to roads, schools, bridges and homes. Some parts of the grid are destroyed as well as theroadtotheCajonDam. Thecostoffixingthedamageis estimated to be $6-10 million. Extra funds will be released for the Government of Honduras (GOH) to invest in reconstruction, and debt repayment has been suspended for three years. The Paris Club also offered to write off 67% of Honduras’s total debt onceanIMF-backedreformplanisinplace. Inaddition, the World Bank announced an interest-free US$1 billion loan for both Honduras and Nicaragua, and the IMF approvedaUS$67millionemergencyloanforHondurasat 0.5%, repayable over 10 years with a 5.5 year grace period (Latin American Monitor, January 1999). IDB officials believe Hurricane Mitch could spur SIEPAC, asserting that the need for economic integration in Central America is now more urgent than ever as countries have to work together to overcome the disaster (Power in Latin America, January 1999). Government / Legislation Empresa Nacional de Energía Eléctrica (ENEE) ENEE has suffered from technical and financial shortcomings which have diminished its operating potential. The enactment of a framework law on the electrical subsector created the National Electrical Energy Commission, allowed the generation of energy by the privatesectorandpermittedtheadjustmentofelectricity tariffs in accord with costs. Nevertheless, energy distribution continues to be inefficient, with losses of 25% in the distribution system. ENEE has a favorable legal framework in place for the development of resources with a public bidding process for aPPAorBuild-Own-Operate(BOO)contractslikely.In 1999, the GOH plans to allow participation of the private sector in the distribution of electricity throughout the country. Nodatehasbeensetfortheprivatizationof ENEE. Ministerio de Energía y Minas The new function of the Ministry of Energy and Mines’ Electricity Subsector, is to plan and normalize the sector. Energy Subsector Framework Law (1994) Geothermal Resources in Latin America & the Caribbean 44PDF Image | Geothermal Resources in the Caribbean and Latin America
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