Special Law Regulating Public Renewable Energy Projects
Congreso Nacional
- Decree: 279-2010
- Published: December 31, 2010
- Issuing body: Congreso Nacional
- Category: Environmental
Summary
This law accelerates the construction of renewable energy projects in Honduras (hydroelectric dams, biomass, and solar) by declaring them of highest national priority. It simplifies administrative procedures, expropriates necessary land without complex legal processes, and exempts these works from paying fees and taxes. It benefits the country by reducing dependence on imported fuels and affected communities through compensation according to international standards.
Considerations
Whereas currently the demand for electrical energy is covered seventy-five percent (75%) by energy generated from fossil fuels, which are imported in their entirety, and only twenty-five percent (25%) is produced by renewable energy companies such as hydroelectric facilities, with estimated projections of annual growth of three percent (3%) in the demand established through the year 2020, which if current levels of energy production by means of fossil fuels continue, represents an enormous cost in terms of opportunity and development of the country, since this represents a strong drain on foreign exchange that currently continues and if said production percentage is not reversed would continue affecting the country's trade balance, a situation that makes it necessary to reverse the energy production percentages in order to allocate those resources to other areas of national development.
Whereas the Plan of the Nation of the Republic of Honduras establishes as a strategic guideline the "Productive Infrastructure as a Driver of Economic Activity," indicating the importance of hydroelectric generation and other renewable energies, in such a way that by the year 2022, the energy matrix demonstrates a net participation of renewable energy, equivalent to seventy percent (70%) of the demand.
Whereas with the purpose of accelerating the execution of the hydroelectric projects Patuca III, Patuca II A, Los Llanitos, and Jicatuyo, the Aguán Valley Energy Complex, as well as other renewable energy generation projects and with assurance within the framework of the Plan of the Nation for Honduras, to raise the production of renewable energies in order to convert the percentage of energy production from fossil fuels to renewable sources; the Executive Branch, through the President of the Republic, is constitutionally empowered to issue extraordinary measures in economic and financial matters, applicable to the entire public sector, including among these measures the implementation of temporary mechanisms for simplification and acceleration of processes with a view to achieving the expedited execution of this type of projects.
Whereas with the purpose of initiating in the short term the studies and construction of the projects described in the preceding Whereas, the Government of the Republic through the National Electrical Energy Company has assigned to renewable energy projects the status of urgent necessity, public interest, and national necessity of the highest priority both to obtain their financing and to contract the goods and services required to begin the works immediately. To fulfill these objectives, the organization of a Special Unit is required, which will be created in due course, that in addition to coordinating the execution of the projects, will be responsible for coordinating all technical, legal, administrative, and financial actions required by the development of these and other renewable energy generation projects and complying with the goals established within the guidelines of the Plan of the Nation for Honduras.
Whereas it is necessary to acquire real property and/or improvements where renewable energy projects will be developed, as well as easements for transmission lines, and therefore it is necessary to establish Factors, Criteria, and Parameters to appraise said property, with the objective of applying formulas, guidelines, and uniform categorizations, which will be subject to affectation as a result of the works necessary to carry out projects of this nature.
Articles
It is declared to be of urgent necessity and of paramount public interest and national need, the construction and implementation of projects for generating energy using national renewable resources: Patuca III (Piedras Amarillas), Patuca II (Valencia) and Patuca II A (La Tarrosa) (hydroelectric), located in the Department of Olancho; Los Llanitos and Jicatuyo (hydroelectric), located in the Department of Santa Bárbara; Complejo Energético Valle del Aguán (hydroelectric, biomass and solar) located in the Department of Yoro; under the coordination of the National Company of Electrical Energy (ENEE), for which it will require all entities of the Honduran public sector, directly or indirectly, in the execution and implementation of these projects, so that they prioritize administrative procedures, legal processes, issuance of licenses, permits or registrations and any other activity required for the prompt execution of such projects.
The provisions established in the preceding Article shall apply generally to the centralized, decentralized and deconcentrated public administration, in particular to the State Secretariat in the Offices of Natural Resources and Environment (SERNA) with respect to the renewal of bonds, canon payments, permits, licenses, concessions, contracts and environmental registrations; the Property Institute (IP), with respect to all cadastral, expropriation and property regulation matters; the State Secretariat in the Office of Finance (SEFIN), with respect to all negotiations, subscription and approval of financing, as well as the timely transfer of financial resources; the Executive Directorate of Revenue (DEI), with respect to the effective, expeditious and transparent exemption of natural and legal persons subject to exemptions, regarding the imposition of goods and services, in accordance with financing agreements, letters of intent, memoranda of understanding or any other bilateral document signed for this purpose; the State Secretariat in the Offices of Interior and Population and the General Directorate of Immigration and Foreign Affairs, with respect to procedures and issuance of letters or residence permits for foreigners who enter to work on these projects; and the State Secretariat in the Offices of Labor and Social Security, in the extension of respective work permits, to the National Port Company (ENP), for the unloading, storage and customs clearance of equipment, materials and tools; to the Institute of Forest Conservation and the National Commission of Energy within the sphere of their competencies. These Projects shall be exempted from the payment of bonds, fees, tariffs, canon payments, charges, rights and rates that the aforementioned institutions and the municipalities have established as requirements of the procedure, permit or service they provide.
Properties located within the zones in which the Patuca III (Piedras Amarillas), Patuca II (Valencia) and Patuca II A (La Tarrosa) (hydroelectric) projects, located in the Department of Olancho, Los Llanitos and Jicatuyo (hydroelectric) projects, located in the Department of Santa Bárbara, and Complejo Energético Valle del Aguán (hydroelectric, biomass and solar), located in the Departments of Yoro and Colón are executed, are declared to be of public utility and subject to expropriation. The President of the Republic in Council of State Secretaries and at the proposal of the National Company of Electrical Energy (ENEE) shall determine through Executive Decree, the areas in which the respective expropriation declaration shall be made. Once the expropriation declaration is issued, the areas shall pass to the domain of the State by full right, it being understood that the value of the appraised price declared shall be held at the disposal of the owner. The areas for resettlement and the properties to be affected via expropriation shall consider those that are necessary for the execution of the projects, including but not limited to: the reservoir area, buffer area, machinery area, material deposits and quarries, access roads, zones for disposal of construction materials and waste, transmission lines and their stations, diversion works and any other that in the judgment of the National Company of Electrical Energy (ENEE) may be necessary.
The process of acquisition and expropriation of properties shall be conducted with exclusion of the administrative and judicial procedures provided for in the Law of Forced Expropriation for these purposes. In this manner the issuance of an Executive Agreement or any other legal formalism is excluded. Nor shall the declaration of public interest contemplated in the Law of Forced Expropriation be necessary, since the present Decree constitutes for all legal effects such declaration. The resettlement of the natural populations that may be affected by the need to obtain the ownership of properties or improvements included within the space in which the works and easements for the transmission lines shall be executed, shall be conducted in coordination with an Interinstitutional Resettlement Commission composed of the National Company of Electrical Energy (ENEE), which shall preside over it, the Property Institute, the Honduran Institute of Anthropology and History, the Attorney General of the Republic and the General Comptroller of the Republic. The appraised price to be paid to the affected private parties when they are legitimate owners or possessors of goods under the terms of the Law of the required property, shall be determined in accordance with the appraisals conducted by the Interinstitutional Appraisal Commission. Said Commission shall take into account the standards and parameters included in the international resettlement policies applied by multilateral development banks, which require rapid and effective compensation equivalent to at least the cost of replacement of the acquired asset.
Once the expropriation is declared, personal notification shall be given to each affected party, and if it is not possible to do so personally, the notification shall be effected by means of two (2) publications in two (2) national circulation newspapers and in two (2) national coverage electronic media. The owner, or in his case, the persons who dispute the ownership of the property to be expropriated, may optionally claim protection regarding the appraised price determined, although not the expropriation, in accordance with the arbitration procedure established in the Law of Conciliation and Arbitration (Decree No. 161-2000). The arbitrator, the National Company of Electrical Energy (ENEE), the arbitral appointee, the appraised price determined by the Interinstitutional Appraisal Commission. The Arbitral Tribunal shall rule on these challenges according to equity. The affected party shall have the right to the remedies established in the Arbitration Law.
The lands of private ownership or in possession for a term equal to or greater than the right of domain by description, which are required for the development of the projects, shall pass to the domain of the National Company of Electrical Energy (ENEE), through assignment, purchase and sale, compensation or expropriation. When the land is still national property, the possessor shall have the right to recognition of the value of the improvements and related benefits that by right of property would be during the Law, for this purpose shall be considered for the appraisal of the right of domain by prescription that the creditors may have before it is declared. The National Company of Electrical Energy (ENEE) is authorized to alienate, for purposes of financing, the real property that it has acquired in relation to the execution of these projects. In the event that a property is acquired by the National Company of Electrical Energy (ENEE), in accordance with what is established in this Article, and it is subject to the charge of a mortgage lien, the creditor or creditors must first be heard, who have preferential right to payment of the appraised price; consequently, said payment shall be made in its composition, without having previously applied the value of the appraised price to the related lien, paid considering the remainder to the owner or owners if there is any. Only those liens shall be recognized that prove to have been made before December 31, 2010, and that have been duly registered and accounted for in accordance with the Law. For the acquisition of real property required to carry out the works to be executed by the Special Unit, this shall be fully empowered to provide the resources required for such acquisitions and to manage the registration of domain with the Property Institute; by means of a trust agreement established in a banking institution. Once the trust is liquidated, the acquired properties shall be transferred in favor of the National Company of Electrical Energy (ENEE).
For the agile execution of the projects, the National Company of Electrical Energy (ENEE), the contractors, consultants and supervisors of the works, in all activities related to official procedures, resettlements, expropriations, assignments, purchases and sales, compensations or affectations of persons and property for the timely execution of the provided properties, shall be completely exempted from the payment of all types of bonds, canon payments, sales tax, fees, tunnels, registration rights and any other tax or tariff applicable to the transfer of real property, excepting the income tax on the Bar Association of Honduras, said exemptions shall also apply to the natural or legal persons who own lands and improvements that are the subject of expropriation, with respect to the transfer of real property.
For purposes of valuation of the properties and/or improvements incident to the development of the projects, the Appraisal Commission is created, which shall be composed of a representative owner and their alternate from the following institutions: Attorney General of the Republic, Superior Court of Accounts, Property Institute, National Agrarian Institute, the Association of Owners organized for this purpose, General Consultor of the Republic, and the National Company of Electrical Energy (ENEE), who shall bear the expenses generated by the activities performed by the members of this Appraisal Commission, the members of which shall be dedicated exclusively, in the name and representation of the public or private entities that designated them, to the activities of the Patuca III (Piedras Amarillas), Patuca II (Valencia) and Patuca II A (La Tarrosa) Hydroelectric Projects (hydroelectric), located in the Department of Olancho, Los Llanitos and Jicatuyo (hydroelectric), located in the Department of Santa Bárbara, Complejo Energético Valle del Aguán (hydroelectric, biomass and solar) located in the departments of Yoro and Colón and others that may subsequently be necessary.
For the agile and efficient execution of the Projects referred to in Article 1 of the present Law, the Special Unit of Renewable Energy Projects (UEPER) is created, dependent on the National Company of Electrical Energy, with an initial budget allocation coming from the Budget of the National Company of Electrical Energy (ENEE), for an initial amount of TEN MILLION LEMPIRAS (L.10,000,000.00). This initial fund shall be increased with resources of the National Company of Electrical Energy (ENEE), transfers from SEFIN, cooperation funds and funds from negotiations with National and International Organizations through the State Secretariat in the Office of Finance (SEFIN), and the Secretariat of Planning and External Cooperation (SEPLAN). The main function of this Special Unit shall be to support the National Company of Electrical Energy (ENEE) in all activities related to the projects, assuming the management of administrative, technical, operative and financial matters related to the adequate and correct execution and implementation of said projects. This Unit shall be headed by an Executive Director, who must have professional qualifications, experience, competence in the energy field, managerial capacity and of recognized honorability. Specialized technical and professional personnel shall be hired by the Special Unit of Renewable Energy Projects (UEPER), such hiring shall not be subject to the compensation limitations referred to in the Law of Reorganization of the Benefit System of the Central Government, contained in Decree No. 220-2003 dated December 19, 2003, nor any other budget provision. The National Company of Electrical Energy (ENEE) without affecting its normal activities may assign plant personnel to provide their services in the Special Unit of Renewable Energy Projects (UEPER) in order to support its organization, particularly in the operation of the projects executed through said Special Unit. For matters related to the acquisition of goods and services necessary for the execution of the projects, the rules and procedures that the aforementioned Special Unit shall establish for this purpose shall be used, based on the principles of publicity, transparency, free competition, equality and the reasons for urgent necessity, which for the execution of these projects is qualified in the present Law.
The National Company of Electrical Energy through the Special Unit of Renewable Energy Projects (UEPER) and within the framework of the present Law shall have the following functions:
- 1)
To study, formulate, design and follow up on the construction and execution of projects for generating energy with national renewable resources: Patuca III (Piedras Amarillas), Patuca II (Valencia) and Patuca II A (La Tarrosa) (hydroelectric), Los Llanitos and Jicatuyo (hydroelectric), Complejo Energético Valle del Aguán (hydroelectric, biomass and solar), and others under the coordination of the Special Unit of Renewable Energy Projects (UEPER). For the foregoing, the National Company of Electrical Energy (ENEE) shall be associated in the creation of commercial companies or in already existing ones, so that with partners from the private or public sector they can execute said projects or others of national interest energy, taking into consideration the Law of Promotion of Public-Private Alliance (APP), or another mechanism deemed appropriate.
- 2)
For the acquisition of real property required to carry out the works to be executed by the Special Unit, this shall be fully empowered to provide the resources required for such acquisitions and to manage the registration of domain with the Property Institute;
- 3)
The Special Unit is duly authorized to implement by its own account or through a consulting firm, the resettlement of persons, and all census, inventory, cadastral, appraisal of affectations and organizations activities, always taking into account that the internal requirements stipulated in international resettlement policies shall be applied for purposes of valuation of indemnifications.
- 4)
The National Company of Electrical Energy (ENEE), through the Special Unit of Renewable Energy Projects (UEPER), is broadly empowered to contract: Construction, consulting services and technical assistance, in the country or abroad, which it requires for its correct operation and functioning. These technical and professional services include among others: Consulting, studies, project management, designs, construction supervision, quality assurance, auditing, and technical verification, as well as the construction and implementation of the projects.
- 5)
The Special Unit of Renewable Energy Projects (UEPER) shall be responsible for ensuring the start-up and operation of the projects, in accordance with the work programs that are structured including the pre-construction, construction, operation and maintenance stages; and,
- 6)
The Special Unit of Renewable Energy Projects (UEPER) must create a monitoring and follow-up system for the construction, operation and maintenance activities of renewable energy projects, including indicators that allow measuring the performance of the operators, whether these are public or private.
The residents of the populations surrounding the dams, whose heirs are affected by the reservoirs, shall enjoy the preferential right of use and enjoyment of the waters, to carry out in an organized manner new activities substitutive of their traditional agricultural, livestock and related labors. For such purpose, the National Company of Electrical Energy (ENEE), through the Special Unit of Renewable Energy Projects (UEPER), shall issue a respective Regulation so that it normalizes and regulates the substitutive activities that shall be carried out in the reservoirs.
The Special Unit of Renewable Energy Projects (UEPPER), through the National Company of Electrical Energy (ENEE), shall present to the National Congress a monthly physical and financial report that shows the progress in the execution of the Projects contemplated in this Law.
The present Law shall be regulated through the Board of Directors of the National Company of Electrical Energy (ENEE), within thirty (30) days from the effective date of the SPECIAL LAW REGULATING PUBLIC PROJECTS OF RENEWABLE ENERGY.
The present Decree shall enter into force as of the day of its publication in the Official Gazette "LA GACETA". Given in the city of Tegucigalpa, municipality of the Central District, in the Convention Center of the Plaza Juan Carlos Hotel, on the nineteenth day of the month of January of two thousand eleven. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY GLADIS AURORA LÓPEZ CALDERÓN SECRETARY To the Executive Branch, Therefore: Execute. Tegucigalpa, M.D.C., January 27, 2011. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC THE STATE SECRETARY IN THE OFFICES OF NATURAL RESOURCES AND ENVIRONMENT. RIGOBERTO CUÉLLAR CRUZ
Related laws
- Special Law Regulating Public Projects of Renewable Energy — This law declares the construction of five renewable energy projects (hydroelectric dams, biomass, and solar facilities) in Honduras as a matter of national urgency. It enables the State to acquire necessary land through expropriation, purchase, or transfer, and creates a special unit to execute projects quickly, exempting them from taxes and bureaucratic procedures. It benefits the country by reducing dependence on imported fuels and affects landowners who will be compensated based on international valuation standards. (Decree 279-2010, 2011)
- Decreto Legislativo No. 279-2010 — Ley Especial Reguladora de Proyectos Públicos de Energía Renovable (Decree 279-2010, 2022)
- Decreto Legislativo No. 46-2022 — Ley Especial para Garantizar el Servicio de la Energía Eléctrica como un Bien Público de Seguridad Nacional y un Derecho Humano de Naturaleza Económica y Social — This law declares electricity as a public good and human right, and orders the rescue of the state company ENEE by renegotiating energy contracts, canceling the private operator ODS, eliminating tax subsidies to generators, and building renewable plants. It benefits poor consumers with free electricity and reduces costs through audits and public control of the national electrical system. (Decree 46-2022, 2022)
- Decreto Ejecutivo No. PCM-138-2020 — Declaración de megaproyectos priorizados de represas hidroeléctricas y autorización al fideicomiso para generación de energía — This decree declares 14 hydroelectric dam projects as priority for Honduras and authorizes a trust fund (managed by Banco Atlántida) to structure, finance, build and operate these works. It aims to change the country's energy matrix, generate employment and mitigate flood risks. The State guarantees financing if projects are not commercially viable. (Decree PCM-138-2020, 2021)
- General Law on the Electric Industry — This law updates the regulations governing the electrical industry in Honduras by allowing competition in electricity generation and modernizing its operations. It creates the Electrical Energy Regulatory Commission (CREE), an independent agency that supervises and controls generator, transmission, and distribution companies to ensure fair rates and quality service for all users. (Decree 404-2013)