Description: 

$850,000 of SREP resources for a technical cooperation to strengthen the energy regulatory, institutional, and policy frameworks of Honduras to facilitate the development and scaling up of renewable energy deployment.

Background:

Honduras is making progress in the development of renewable energy technologies. This is occurring both in the grid-connected and off-grid domains, yet the country still faces a number of institutional, policy, financial, and knowledge barriers.

The SREP for Honduras is structured around 3 main components: The first one is called FOMPIER (acronym in Spanish for “Strengthening the Renewable Energy Policy and Regulatory Framework”), for which there are $1.7 million allocated. Half of these resources ($850,000) will be managed by the IDB under the current Technical Cooperation Project Proposal, focusing on grid connected policy and regulatory aspects; the other half will be managed by the World Bank.

The FOMPIER project leverages $850,000  SREP resources to support the development and implementation of policies, laws, regulations, rules, standards and incentive schemes aimed at improving the integration of renewable energy in the energy sector.

Objectives and Outputs:

Considering the development benefits of renewable energies, this project acts as a comprehensive approach to scale-up renewable energy development and to remove critical barriers, with the objective of improving the overall energy policy and related institutional framework.

This technical cooperation initiative seeks to support the development of: (i) a long-term energy policy to increase the share of renewable energy in the overall energy mix; (ii) legislation and technical standards appropriate for each renewable energy technology; (iii) incentive models for the effective development of each renewable energy technology, which fully reflects their associated benefits; (iv) guidelines for obtaining construction, operation and supply permits for renewable energy installations; and (v) definition of intra and inter-agency responsibilities, while building capacity in order to improve the integration of renewable energy in the energy sector. It is expected that the FOMPIER project will lead to strengthened institutional capacity of the government institutions directly involved in the execution of the project.

The newly established standards and specifications for equipment are expected to lead to increased confidence and better functioning of renewable energy hardware and projects. As a result of this sector certainty, considerable job creation is anticipated as well. Furthering the country’s renewable energy ambitions, Honduras expects to achieve an electricity sector ratio of 60 percent renewable and 40 percent fossil fuel by 2022 and 80 percent renewable and 20 percent fossil fuel by 2034. This initiative is viewed as an important step towards transforming the Honduran energy economy, creating market certainty, and creating a sizeable amount of new jobs.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

IDB Project Portal

Project Details:
Project Document | Proposed Decision
Approved on October 26, 2012 (Approved Decision)
Approved amount(s):
USD 23,000 (grant funding) ( USD 827,000 canceled)

Comments and Responses:
United Kingdom (October 30, 2012)