Tegucigalpa, Honduras --- (METERING.COM) --- September 18, 2008 - Honduras has been awarded the first round of funding for its second energy sector support program, which will finance priority investments in transmission and support a program for reducing losses. The aims are to increase the capacity of the electric power grid to supply local and regional markets and to ensure sustainability to meet growing future demand.

The national utility, Empresa Nacional de Energia Eléctrica (ENEE) will carry out the program with Inter-American Development Bank (IDB) financing totaling US$48.5 million. As part of this program, the IDB has approved a first US$28.5 million loan to finance priority transmission investments and will support a restructuring of the company.

The works to be financed in the electric power grid are located in areas of the transmission system where demand is growing most rapidly and supply is not reliable due to transmission capacity constraints, in particular the North Atlantic zone and the central ring, which supplies the Tegucigalpa metropolitan area and is a key component of the system transporting electricity to high demand areas, such as San Pedro Sula’s industrialized development zone.

The works are expected to result in increased transmission capacity as well as an improvement in the reliability and quality of supply. The loss reduction component should lead to a reduction of commercial losses and an improvement in customer service.

The program forms part of a broader electricity sector support and ENEE recovery program, with other supporters including the World Bank, the Central American Bank for Economic Integration, and the United States Agency for International Development (USAID).

A second US$20 million IDB loan is expected to be approved in 2009.