Supervision of the Distribution Loss Recovery Project 

Since 2016, MHI has been assisting the Government of Honduras to improve the efficiency of the Honduran electric distribution system. The government and other energy sector stakeholders have split distribution and energy commercialization from the National Company of Electric Energy (ENEE) and initiated a seven-year managing service contract with an investment component.

Acting as the Supervisor of this project, MHI is providing technical and commercial assistance to enhance financial cash flow. MHI is also responsible for the oversight and reporting of the Operator on the distribution system and customer service of the ENEE.

MHI is working to achieve the following project objectives:

• Improve the quality of technical and commercial service for customers;
• Improve monthly invoicing and reduce accounts receivable levels;
• Reduce the accumulated debt;
• Reduce technical and non-technical losses.

“MHI is making significant contributions to the conceptual engineering of projects— especially in matters of strategic planning, operation, supervision, and project control,” says Arturo Iporre (Senior Project Consultant), MHI. “After two years of working on this project, we are extremely proud of the apparent results and positive trends that we have been able to put in motion so far.”

Since the beginning of the contract, billing management efficiency indicators have experienced a 6% growth while defaulting accounts have decreased by 22%. On the financial side, the Operator has also committed USD $105,620,472 for the required investments.

On the technical side, the System Average Interruption Frequency Index (SAIFI) dropped from 3.25 to 1.74 interruptions per month (46.5%), and interruption times plummeted an outstanding 68.7% from a duration of 5.05 to 1.58 hrs. The Service Availability Index also improved by 0.5%, up to 99.8%.

Other achievements relate to the development and dissemination of the Supervisor's methodology, the preparation of the Operator's purchase regulation, and control of the Investment Plan. 

MHI has contributed to these accomplishments by training the Operator in the elaboration of strategic action plans in the technical, commercial, and energy control areas. Moreover, MHI provided support to address and brief international and local key stakeholders on the project’s requirements and progress.

To sustain the current key performance indicators’ positive trend and ensure long-term success, MHI devises the following steps as part of the project roadmap:

• Complete the digitalization project of the distribution network;
• Carry out committed investments in the areas of automation, control, protections, network tele management (SCADA) systems, energized lines related work, and loss reduction;
• Develop a specific and effective plan to implement a Commercial Information System integrated with the information systems that the company currently has.

“Reduction of electrical losses is a complex project that requires technical, commercial, and economic solutions but mainly actions of social management with the community. We look forward to continue making significant contributions to improve the efficiency of the Honduran electric distribution system for years to come.” – Eduardo Saavedra, Distribution and Reduction of Losses Specialist Consultant, MHI.