Agreement-SEN-110-2025

OBJECTIVE: to establish and unify the roadmap of administrative, technical, and social procedures that a renewable energy project developer must manage before the different competent authorities, indicating the stages, requirements, and inter-institutional coordination necessary for the construction and operation of such projects in Honduras.

ACRONYMS AND DEFINITIONS: CND – National Dispatch Center; CPLI – Prior, Free and Informed Consultation; CREE – Electric Energy Regulatory Commission; DECA – Directorate of Environmental Assessment and Control; DEVELOPER – Any natural or legal person, public or private, that has the intention of carrying out or is currently conducting studies, designs, procedures, construction, or operation of a renewable energy generation project; DGEREE – General Directorate of Renewable Energy and Energy Efficiency; ENEE – National Electric Energy Company; ICF – National Institute of Forest Conservation; IHAH – Honduran Institute of Anthropology and History; INA – National Agrarian Institute; INHGEOMIN – National Institute of Geology and Mines; LGIE – General Law of the Electrical Industry; ILO – International Labor Organization; PCM – Presidency with Council of Ministers; PGR – Office of the Attorney General of the Republic; RLGIE – Regulations of the General Law of the Electrical Industry; RTN – National Tax Registry; SEN – State Secretariat in the Dispatch of Energy; SERNA – State Secretariat in the Dispatches of Natural Resources and Environment; SIN – National Interconnected System; TdR – Terms of Reference; TGR – General Treasury; and UEPER – Special Unit for Renewable Energy Projects.

SCOPE OF APPLICATION: Applies to all renewable energy projects that wish to be constructed in Honduran territory, regardless of whether the developer is public or private, its technology, installed capacity, or location. Excepted from this provision are projects led by ENEE and executed by UEPER, which shall be carried out in accordance with what is established in Decree 279-2010 and its regulations. However, UEPER must submit the general information of the projects it leads to SEN when SEN indicates.

COMPETENT AUTHORITIES: SEN, DGEREE, CREE, CND, SERNA, sectoral institutions such as IHAH, INA, ICF, INHGEOMIN, and others, as applicable. CHAPTER II STAGES OF PROJECT DEVELOPMENT

For the Development of projects that take advantage of natural resources for electric energy generation, the following stages are declared:

• 1)

  Prospection Stage;

• 2)

  Studies Stage;

• 3)

  Pre-construction Stage;

• 4)

  Construction Stage; and, 5. Resource Utilization Stage. Each stage contains phases with objectives, responsible parties, actions, documents, and timelines. The phases within each stage may be developed in parallel if the requirements of each permit.

PROSPECTION STAGE. This stage aims to conduct the first technical, legal, and social evaluations of the project, includes the request for support from SEN, preliminary analyses of the resource, initial opinions, sectoral permits, and initial contact with the communities. Its purpose is to determine the viability of the process and establish the legal and social foundations to continue to the next phase.

START OF PROCESS. The developer shall initiate the formal process before SEN to validate the viability of the project construction process, presenting a request for technical support through the single window, so that subsequently the Secretary General shall promote through an admission order to the DGEREE; the request shall be accompanied by the project profile that will contain: the objectives, the location, RTN of the business entity, schedule, costs, risks, and environmental impacts that can be observed preliminarily, as well as the preliminary evaluation of the resource. The DGEREE shall issue the forms that will be published on the SEN website to comply with this requirement. As compensation for the administrative services of file opening, document management, preliminary analysis, and issuance of the process initiation certificate, the developer shall pay through TGR the amount of L 22,000.00 (twenty-two thousand lempiras exactly). For field inspections, it shall be regulated according to what is provided in Agreement No. 002-2019 issued by SEN. The DGEREE shall deliver within a period of 10 business days the certificate that certifies the start of the process to the Developer. The General Secretary of SEN shall organize the file according to its procedures.

REQUEST FOR TECHNICAL PREMISES BEFORE THE SYSTEM OPERATOR (CND): In order to determine the prefeasibility of interconnection to the SIN and in compliance with what is established in the Technical Standard of Access, Connection and Use of the Transmission Network published in the Official Gazette La Gaceta on August 25, 2023, the Developer shall request from the System Operator (CND) the technical premises necessary to conduct the Electrical Impact Studies on the Network. The obtaining of these premises is considered the enabling step for the Developer to evaluate the technical prefeasibility of its project. The request shall be accompanied by the following requirements: A. General data of the natural or legal person. B. Copy of the document that accredits the legal representative, if applicable. C. Proposed Connection Point with geographic coordinates. D. One-line diagram and preliminary technical characteristics of the facilities. E. Demand and/or generation that it intends to exchange at the Connection Point for a horizon of four (4) years. F. Any other information that the System Operator deems relevant and that is defined in its regulations. The System Operator (CND) shall issue a preliminary technical opinion on the application submitted by the developer. Following this opinion, according to the project's connection point, it shall be governed in accordance with the following procedure: a. If the Access Request is to a node of the Regional Transmission Network (RTR), the Regional Operating Entity (EOR) shall prepare in coordination with the System Operator (CND) the technical premises in accordance with the procedure described in the Regional Electricity Market Regulation (RMER). b. If the Access Request is to a node of the National Transmission Network: The System Operator, in coordination with the Transmission Company Owner, shall deliver to the Interested Party so that it may develop the respective Electrical Studies in accordance with the particular requirements for the Connection Point requested by the Developer. The system operator (CND) shall deliver to the developer the technical premises within the period defined in the Technical Standard. The developer shall submit a copy of such premises to SEN to be annexed to the project file.

PRIOR ACTIVITIES AND PRELIMINARY RESOURCE ANALYSIS. It consists of coordinating the environmental process, crossing information between what is provided by the Developer, SEN shall establish the minimum requirements according to technology of what a renewable energy project must comply with and SERNA shall establish the applicable provisions according to its competence, in the region where the project is proposed to be developed. SEN shall submit to SERNA via email, a copy of the file so that it may issue a pre-environmental opinion, as well as the TdR according to technology. Both SERNA and SEN shall conduct the project socialization and where applicable the FPIC in accordance with the established procedures. The period that SEN shall have to carry out this activity is twenty (20) business days counted from the execution of what is provided in Article 7 of this guide.

ADDITIONAL PERMITS BY TECHNOLOGY AND LOCATION. The developer shall manage before the institutions that according to Law apply and in accordance with the type of technology and location of the project, the following permits:

• 1)

  IHAH: Archaeological Authorization;

• 2)

  INA: Land Use Permit for ejidal/communal lands;

• 3)

  ICF: Forest Permit;

• 4)

  INHGEOMIN: Permit for extraction of subsurface materials; and, 5. SERNA/DECA: Pre-technical environmental opinion. Once the required permits are completed, SEN has a period of ten (10) days to notify the developer of the availability to begin what is provided in the subsequent article. For the corresponding entities to issue their certificate, the developer shall present a COPY of the certificate issued by DGEREE of SEN, which certifies having complied with the initial requirements as provided in Article 7 of this guide. After a period of six (6) months counted from the submission of the last formal application by the Developer to the corresponding sectoral institution, if any of the required permits has not been issued, SEN shall proceed ex officio to the definitive filing of the file, due to the absence of an indispensable requirement to continue to the next phase. The case is excepted wherein the Developer demonstrates to SEN conclusively that the delay is not attributable to him and that he has filed the corresponding administrative or judicial remedies against the omitting institution to obtain a response. In such case, SEN shall suspend the deadlines to decree the expiration and corresponding filing.

SEN shall coordinate, together with SERNA and the municipality, the installation of dialogue tables and joint planning with the communities and the Developer, which allow openly and transparently discussing the execution of the project, its possible impacts and benefits, and exploring mechanisms of community participation, prior to the formal consultation process. Furthermore, in those areas where indigenous peoples live, the Developer must present the different stages of the project, the involvement of the community, and the impacts of the project development prior to the formal consultation that requests ILO Convention 169. The period to develop this stage shall be thirty (30) business days counted from the notification by SEN, this notification shall contain the planning for the development of the meeting between all actors.

CERTIFICATE OF KNOWLEDGE OF INTENTION OF STUDIES. Following the dialogue tables and based on the information from the Prospection Stage (preliminary evaluation of the resource, technical premises of the CND and sectoral permits), the Developer shall formally request from the Municipality or municipalities the issuance of a prefeasibility permit or analogous document. This permit certifies that the community and the local authority accept the concept, technology, and preliminary location of the project, leaving the final execution subject to the results of impact studies. The issuance of this permit shall be an indispensable requirement for the developer to proceed to the Studies Stage. The reasoned denial to issue this permit shall cause the definitive filing of the file at SEN, thus protecting community interest and minimizing investment risk. The deadlines for municipalities to issue this permit shall be those established in the Municipalities Law and the Administrative Procedure Law. The Developer is responsible for managing and promoting the issuance of such permit. After a period of six (6) months counted from the formal request of the Developer to the Municipality, if it has not been issued, SEN shall proceed ex officio to the definitive filing of the file, except in the case wherein the Developer demonstrates conclusively that the delay is not attributable to him and that he has filed the corresponding administrative or judicial remedies to obtain a response. In such case, SEN shall suspend the deadlines in order to safeguard the right of the Developer and the community, in accordance with the interest of the common good.

STUDIES STAGE. This stage aims to execute technical, environmental, financial, and social studies to determine the viability of the project. It begins with the request for a permit before CREE, continues with the execution of studies, and concludes with its socialization before the community. The objective is to have detailed and verifiable information that allows advancing toward the pre-construction stage with legal, technical, and social backing.

REQUEST FOR STUDY PERMIT. The developer shall manage before CREE the study permit for the construction of generation works that are to use renewable natural resources, to conduct technical and environmental studies that support the viability of the project. This request must be presented in accordance with what is established in Article 7 literal d) of the General Law of the Electrical Industry, which empowers developers to conduct prior studies under certain conditions. The expected document is the official certification of the permit that authorizes the developer to execute the studies, which must be submitted to SEN. For compliance with this article, CREE shall request a digital copy of the file from SEN, in accordance with the administrative simplification law and in consonance with the principles of celerity and efficiency, and SEN has (10) business days to submit the digital copy. The maximum period for CREE to issue a resolution is 60 business days, counted from receipt of the digital copy of the file and compliance with all technical and legal requirements required, in accordance with the Administrative Procedure Law.

DEVELOPMENT OF STUDIES. Once the permit from CREE is obtained, the developer shall proceed to the preparation of the technical and financial studies required to determine the viability of the project. These studies must be prepared in accordance with the technical guidelines established by SEN, SERNA (In the case of hydric studies) and other competent entities, considering the complexity, technology, and location of the project, which shall be delivered by each institution to the developer. The duration of this phase is variable and shall depend on the scope of each project, having as a maximum what is established by LGIE. As a result, the developer must submit all finalized studies to SEN.

FEASIBILITY STUDIES AND FINAL TECHNICAL OPINION OF THE SEN. The developer must submit to the SEN all final technical and financial studies of the project. The SEN, through the DGEREE, shall evaluate these studies by verifying: technical and economic viability, regulatory compliance, coherence with prior opinions granted by the competent authority, and proper consideration of social and environmental impacts.

REQUEST FOR NETWORK ACCESS. The developer must request from the National Dispatch Center (CND) permission to interconnect to the National Interconnected System (SIN). The request must be aligned with the technical premises issued during the prospecting stage and contain: general company data, accreditation of the legal representative, proposed connection point, single-line diagram, technical characteristics, demand and/or generation forecast for four years, and any other information required by the system operator. The timeline for the CND or distribution company to issue a resolution on the network access request is that established in the TECHNICAL STANDARD FOR ACCESS, CONNECTION AND USE OF THE TRANSMISSION NETWORK (NT-ACUT), and the expected document is a certificate or connection certification issued by the CND, which must be presented to the SEN. In the case of a project connecting to the distribution network, the document must be issued by the distribution company.

PREPARATION OF TERMS OF REFERENCE FOR SERNA. The SEN shall communicate by official letter with SERNA confirming that the developer has met the required conditions (as provided in Article 17) of this guide and shall evaluate the advisability of preparing the Terms of Reference that will allow the Developer to comply with the guidelines that SERNA requires to obtain the environmental license. SERNA shall respond to the SEN by official letter with completion of the Terms of Reference, should it apply, to provide continuity to the subsequent procedures.

SOCIALIZATION OF STUDY RESULTS WITH THE COMMUNITY AND THE MUNICIPALITY OR MUNICIPALITIES INVOLVED. With the objective of ensuring transparency, participation and informed consent of the stakeholders so that specific mitigation measures, compensation and benefit-sharing mechanisms can be negotiated and agreed upon, based on accurate information from the studies. In cases where applicable, following what is established in Articles 12 and 15 of this guide, the Prior, Free and Informed Consultation (CPLI) shall be carried out in accordance with ILO Convention 169 and current national legislation. In all cases, an open town hall meeting shall be held with the municipality or municipalities involved in the jurisdiction where the project will be developed. The process includes presentation of studies, collection of community observations, evaluation of proposals and recording of possible reasoned objections given that the concept has already been approved. Additionally, the developer shall assume all costs of the process, which may extend between 30 and 60 calendar days depending on project complexity. The expected result is a socialization record duly endorsed, which shall be submitted to the SEN as evidence of compliance. The deadline for submission of the Socialization Record shall be at the Developer's discretion; however, in cases where applicable, the developer must comply with all provisions of the ILO Convention, guaranteeing its proper execution.

REQUEST FOR ENVIRONMENTAL LICENSE. The developer must submit to SERNA the request for Environmental License, accompanied by a certificate issued by the SEN confirming compliance with the requirements established as provided in Article 17. The request shall be accompanied by the documents requested by SERNA, in accordance with current environmental law and the agreements and regulations issued by SERNA or the competent authority. The timeline for the granting of the Environmental License shall be as provided in the General Environmental Law and its Regulations. The developer shall present to the SEN the operative environmental license that SERNA or the competent authority issues; however, to connect to the SIN, the Developer must present the definitive Environmental License as an indispensable requirement.

PRE-CONSTRUCTION STAGE. This stage is aimed at consolidating all permits and requirements necessary to formally begin project construction. It includes registration in the CREE registry, the request for interconnection to the SIN, final technical and environmental validation by SERNA and SEN, and obtaining the definitive environmental license. Its main function is to ensure that the project is completely enabled from the technical, legal, social and environmental point of view for its physical execution.

EXECUTION OF THE NETWORK ACCESS, CONNECTION AND USE CONTRACT. As a fundamental requirement of the Pre-Construction Stage, the Developer must negotiate and execute the Network Access, Connection and Use Contract with the corresponding network operator (Transmission Company or Distribution Company). Said contract shall be governed by the provisions of the LGIE and the Technical Standard for Network Access, Connection and Use (NT-ACUT) in effect. This document formalizes the technical and commercial rights and obligations between the generator and the network operator and is an indispensable requirement to obtain the final construction approval. A copy of the duly executed contract shall be sent to the SEN for its incorporation into the project file by the developer.

REGISTRATION IN THE PUBLIC REGISTRY OF CREE. The developer must request its registration as a Generating Company in the Public Registry of the Electric Subsector administered by CREE. The request must include the corresponding form and all required documentation supporting the legal and technical existence of the company. CREE shall evaluate the request in accordance with what is established in Articles 5 and 10 of the RLGIE and in Article 3 section D number XVI of the LGIE. The expected document is a resolution issued by CREE together with the definitive registration record. The timeline for delivery of the resolution issued by CREE shall be as provided in the LGIE regulations and supplementarily by what is provided in the General Law of Public Administration. The Developer shall send to the SEN the Resolution issued by CREE.

REQUEST AND ISSUANCE OF THE DEFINITIVE ENVIRONMENTAL LICENSE. SERNA shall expedite the procedures to grant the definitive environmental license, which validates that all conditions and measures established in the operative license have been properly implemented. This license is intended to confirm the effectiveness of applied mitigation measures, the absence of new environmental risks and compliance with commitments acquired during the planning phase. The request must be supported by the requirements of the previously approved environmental Terms of Reference. The timeline for this issuance shall be that established in the General Environmental Law. The functional environmental license must be sent to the SEN.

RESOLUTION FOR PROJECT CONSTRUCTION. The SEN shall evaluate the complete documentation of the developer, including: Definitive Environmental License, Contract with the National Dispatch Center, Public Registry of the Electric Subsector, CPLI results (if applicable), Water Contract (if applicable), feasibility studies and a detailed compliance report of all conditions established in technical opinions and community agreements. The SEN may establish additional conditions to ensure sustainable project development. The maximum timeline for issuing this resolution is 30 business days from the fulfillment of all technical and legal requirements.

CONSTRUCTION STAGE. This stage is intended to execute the physical work of the project in accordance with the permits, studies, licenses and conditions previously approved. It also includes activities of community information and technical, environmental and social supervision during the construction process.

INFORMATION TO THE COMMUNITY REGARDING CONSTRUCTION. The developer shall conduct an informational session with the communities and key stakeholders to present the construction schedule, main activities, expected impacts, mitigation measures and communication channels and mechanisms for addressing concerns. This session must be inclusive, understandable and accessible, using visual resources and clear language. Participation shall be documented through a record signed by attendees and must have the presence of community and municipal representatives and Central Government. The maximum timeline for holding this session is 10 calendar days before the start of construction. A socialization record shall be prepared, which shall be sent to the SEN for inclusion in the project file.

PROVISION OF COMPLEMENTARY SERVICES AND TECHNICAL REQUIREMENTS. Every new power plant is obligated to comply with the provision of Complementary Services and minimum technical requirements, in accordance with the Technical Standards issued by the competent authority.

EXECUTION OF PROJECT CONSTRUCTION. The developer is responsible for executing the works in accordance with the designs and conditions approved by the SEN, ENEE/CND, SERNA and other competent authorities. During this phase, the developer must ensure: - Technical supervision that ensures compliance with approved studies and opinions; - Effective implementation of the environmental and social measures established in the environmental management plan; - Compliance with social agreements derived from prior consultation and other participatory processes; - Preparation and delivery of periodic progress reports with technical and visual evidence; - Immediate notification to the SEN by the Developer of any substantial modification to the schedule or technical specifications of the project. The duration of this phase will depend on the scale and complexity of the project; the SEN may conduct inspection visits or audits to verify compliance.

RESOURCE UTILIZATION STAGE. This stage includes all activities related to the operation, monitoring, maintenance and effective utilization of the energy resource for continuous and safe renewable energy generation. Compliance with this stage ensures that the project operates in accordance with the parameters established during previous phases, maintaining respect for technical, environmental and social standards.

1. - TECHNICAL OPINION OF WORK COMPLIANCE. Once the physical works of the project have been completed, the Developer must request from SEN the issuance of the Technical Opinion of Work Compliance. To do so, SEN, through DGEREE, shall verify through inspection and documentary review that the construction has been executed in accordance with the designs, plans, and conditions established in the Construction Resolution and the Definitive Environmental License. The issuance of this favorable opinion is an indispensable requirement to begin the Testing Phase.

TESTING. Upon obtaining the Work Compliance Opinion, the Developer shall initiate the Testing and Commissioning Phase, which shall be coordinated with the National Dispatch Center (CND). This phase has the following objectives:

• a)

  To verify the correct functioning of all equipment and systems of the generation plant;

• b)

  To conduct synchronization tests and energy injection into the National Interconnected System (SIN) in a controlled manner;

• c)

  To verify compliance with the technical requirements established in the Technical Standard of Access, Connection and Use of the Network (NT-ACUT) and other applicable regulations; and, d. To ensure the proper functioning of protection, control, and commercial measurement systems. The CND shall supervise this process and shall issue the compliance record of the tests once they have been completed satisfactorily. The developer must submit the Compliance Record to SEN to be filed in its expedient.

START OF COMMERCIAL OPERATION AND TECHNICAL MONITORING. Once construction has been completed, the CND or the Distribution Company, as applicable, shall issue the corresponding certification of start of operations, in accordance with the deadlines established in current regulations issued by CREE. Continuous monitoring mechanisms must be applied that verify the technical performance of the project, the quality of energy injected, and compliance with commitments made to the system operator. The developer must submit quarterly technical reports to SEN and update information as established in the LGIE regulations to CREE. The developer must submit the commercial operation start certificate to SEN so that it is annexed to the expedient.

ENVIRONMENTAL AND SOCIAL MONITORING. During operation, the developer is obligated to implement and periodically report the mitigation, compensation, and environmental monitoring measures established in the functional environmental license. Likewise, the developer must keep community dialogue mechanisms updated, comply with social commitments, and document its actions through semi-annual reports submitted to SEN and SERNA. Non-compliance may result in environmental audits or reviews by authorities.

OTHER ASSOCIATED PERMITS. Depending on the technology used, the project location, or the use of specific natural resources, the developer must process and maintain valid all special permits required by other institutions, such as water rights, land use, mining concessions for construction materials, or others. SEN may request evidence of compliance at any time.

PERIODIC EVALUATION OF PROJECT PERFORMANCE. SEN may, on its own initiative or at the request of a party, conduct periodic evaluations of the overall performance of the project, considering technical, environmental, social, and economic aspects. These evaluations may result in recommendations, adjustment requirements, or in extreme cases, in the review of conditions established in licenses and permits.

REPORT OF IMPACT AND BENEFITS. At the end of the second year of operation and every five years thereafter, the developer must submit a comprehensive report that documents the positive impact of the project in terms of emissions reduction, local employment generation, community development, technological innovation, or any other benefit derived from the project. This report must be public and shall be available on the SEN website.

MONITORING AND REPORT OF NON-COMPLIANCE. SEN, in its role as governing entity, shall conduct continuous monitoring of compliance with the stages and requirements established in this guide. In case SEN verifies non-compliance by the Developer, SEN has the power to: a) Issue a non-compliance notification, requiring remedy within a determined deadline according to the type of non-compliance and technical assessments, leaving formal evidence in the project expedient; and, b) If non-compliance persists, SEN, by virtue of its inter-institutional coordination function, shall send an official and reasoned report to the competent authority (CREE, SERNA, Municipality, etc.), detailing the failure, so that such authority, within the framework of its own legal powers and procedures, may consider the non-compliance in the proceedings that fall under its competence.