The total installed generation capacity powering Honduras is 1,568 megawatts. A 2007 report by the World Bank indicates that the electricity sector of Honduras is poorly managed by the Empresa Nacional de Energ�a El�ctrica, with electricity losses of 25 percent and frequent use of emergency generators to meet demand.
The World Bank's 2007 report indicates that most of the energy losses suffered in Honduras are due to fraud, theft and illegal connections. The organization expects an energy crisis in Honduras as a result of the combination of inefficient management and its dependence on thermal power. Since the 1980s, Honduras has been steadily transforming from a state dependent on hydroelectric power to one dependent on thermal power, leading to transitional pains in the 1990s. As of the report's writing, Honduras relies on thermal power for almost two-thirds of its energy generation capacity and is highly vulnerable to the volatility of international oil prices.
The World Bank estimates that Honduras incurs annual financial losses of almost 2 percent of its gross domestic product due to the mismanagement of Empresa Nacional de Energ�a El�ctrica and the difficulty of procuring appropriate investment. The organization's report states that the average electricity tariff in Honduras only covers about 80 percent of the efficient supply costs.