Electrical Grid

Mérida, June 16, 2026 (venezuelanalysis.com) – The Venezuelan government has signed two agreements with foreign companies as part of efforts to bolster the country’s National Electric System (SEN).

On Monday, Acting President Delcy Rodríguez penned a memorandum of understanding with GE Vernova, a company formed from the 2024 breakup of US conglomerate General Electric, at Miraflores Palace in Caracas.

“This memorandum is historic for Venezuela, so we can recover such an essential service for the Venezuelan people,” she stated during a televised broadcast. “I have asked the teams to convert this memorandum into a contract as soon as possible and start the works.”

According to Rodríguez, the agreement will incorporate 1,000 Megawatts (MW) into Venezuela’s electricity grid in the next 24 months, and 5,000 MW over four years. The acting president added that GE technicians have spent “six weeks” in the country assessing conditions of electric equipment.

Rodríguez did not disclose what the deal entails, nor what components of the electric grid will be turned over to GE Vernova, but stated that the plan concerns generation, transmission, and electricity substations.

The Venezuelan acting leader went on to thank US Chargé d’Affaires John Barrett, who was present at the ceremony, for promoting engagement with major US corporations like GE. Company executives Roger Martella and Eric Gray were likewise in attendance. Martella stated that GE’s objective was to quickly reactivate electricity generation. 

“We want to move quickly so the system can work as best as possible in a few months. We already have an agreement on technical details,” he said.

Two days earlier, Venezuelan authorities announced a separate accord with Argentina-based firm Industrias Metalúrgicas Pescarmona (IMPSA) to rehabilitate the Manuel Piar and Antonio José de Sucre hydroelectric projects, known as the Tocoma and Macagua dams. Both are located in the Caroní river, in Bolívar state, which also supplies the Simón Bolívar Hydroelectric Plant, known as the Guri Dam.

The official release indicated that the agreement aims to inject 2,640 MW into the grid. IMPSA President Jorge Salcedo clarified on social media that the company’s initial target is to restore 672 MW of capacity from Tocoma within 19 months. 

“This agreement launches a broader effort to strengthen Venezuela’s power system through a comprehensive plan that could deliver up to 2,160 MW at Tocoma and 480 MW at Macagua over the next five years,” he wrote.

The Tocoma project dates back to the 2000s. In 2008, Venezuela’s state electricity company CORPOELEC hired a construction consortium headed by Brazilian firm Odebrecht to build the dam, with IMPSA tasked with supplying machinery. 

However, despite costs running over US $9.3 billion, more than triple the original $3 billion budget, the project was not culminated. Venezuelan authorities reported that construction was at 90 percent completion in 2016. A $1.2 billion debt owed by CORPOELEC saw IMPSA suspend activities with only two of the ten projected turbines partially installed.

According to Reuters, IMPSA is holding most of the contracted equipment in storage and will replace the missing or obsolete ones with new technology.

IMPSA was temporarily owned by the Argentine state before being privatized by the Milei administration in February 2025. The company was acquired by the US-based consortium Industrial Acquisition Fund (IAF). IAF’s main partner is ARC Energy, headed by close Trump ally and donor Jason Arceneaux.

Venezuela’s electrical system has suffered under years of US sanctions as well as underinvestment, lack of maintenance, and corruption. Around 40 percent of its installed 30,000 MW capacity is currently operational, with generation deficit around 3,000 MW meaning regular blackouts in most of the country.

Strengthening the electrical supply is a precondition for the country’s economic recovery, with growing oil production placing an additional burden on the grid.

The Rodríguez acting government has sought to address the issue by opening the electricity system to the private sector, with GE and IMPSA the first corporations formally engaged. 

On June 4, the National Assembly preliminarily approved a reform of the Organic Law of the National Electricity System. The new legal framework breaks with the 2007 legislation under Hugo Chávez that centralized the grid under CORPOELEC and defined all stages of electricity generation and distribution as “strategic for the nation.”

The reform allows for private sector participation in generation, transmission, distribution, and commercialization ativities through concessions lasting up to 25 years. It also envisions new tariff structures based on “real costs and reasonable returns” for investors.

Edited by Ricardo Vaz in Caracas.

Caracas, June 4, 2026 (venezuelanalysis.com) – The Venezuelan National Assembly preliminarily approved on Tuesday a reform to the country’s Organic Law of the National Electricity System and Service, proposing a structural overhaul of the National Electricity System (SEN).

One of the most significant changes is the incorporation of the private sector in electricity generation, transmission, distribution, and commercialization activities, breaking with two decades of state monopoly through the National Electric Corporation (Corpoelec).

According to the draft text seen by Venezuelanalysis, private corporations and joint ventures will be able to operate in the electric grid in what is termed a “diversification of actors in the service chain.” The mixed ventures, where the state can hold majority or minority stakes, will be approved directly by the government and not by the National Assembly.

“In recent decades, the electric system has showcased structural and financial limitations […] as a result of the productive reality and the negative impact of unilateral coercive measures,” the proposed law reads. “Faced with this reality, the Venezuelan state must assume an institutional and judicial reengineering.”

The bill establishes concessions with a maximum duration of 25 years, renewable for a further 15 years under specific conditions. Once a concession expires, all infrastructure, assets, substations, and data will automatically revert to the state in good condition and without compensation.

The proposed legislation announces the creation of a new tariff scheme “based on real costs and a reasonable return for investors.” Electricity, like most public services, has been heavily subsidized in recent decades in the Caribbean nation. The bill additionally introduces obligations for electricity distributors to compensate users for damages caused by blackouts or other failures.

The reform likewise establishes the possibility for the executive branch to grant tax exemptions to projects linked to renewable energy, rural electrification, or strategic investments in the electricity sector.

The 42-article legislation will now be subject to discussions and amendments before a second and decisive vote. 

If approved, it would repeal the Organic Law for the Reorganization of the Electricity Sector, enacted by former President Hugo Chávez on July 31, 2007, which merged the country’s seven existing electricity companies through the creation of the National Electric Corporation. The legislation also defined all stages of electricity generation and distribution as “strategic for the nation.”

During Tuesday’s parliamentary session, United Socialist Party (PSUV) lawmaker Orlando Miranda argued that the electricity reform represented a “mixed and private capital strategy under a rigorous regime of concessions and public supervision.” 

He noted that government plans to reinforce the grid with thermoelectric plants in the past 15 years were hampered by US economic sanctions. Miranda went on to add that increased tariffs are being studied to reflect the “real costs” of the system.

For his part, opposition legislator Ezio Angelini (Un Nuevo Tiempo) demanded that the reform address corruption, which he identified as a key factor behind Venezuela’s recurring power outages.

Angelini stated that in 2019 Venezuela generated around 20,000 megawatts (MW) while consuming approximately 12,000. Today, he claimed, the country produces close to 12,000 MW, roughly 40 percent of installed capacity, while demand has risen to 14,000. On May 11, Interior Minister Diosdado Cabello stated that electricity demand had surpassed 15,500 MW due to increased oil production.

Zulia state, considered the cradle of Venezuela’s oil industry, and other western regions have experienced daily blackouts lasting between eight and twelve hours in recent weeks. Supply instability also affects other services such as water pumping and cooking gas distribution.

Frequent power outages have also gripped oil fields in the Orinoco Belt, as crude extraction relies on electric motors that are vulnerable to tension fluctuations. According to Bloomberg, the Venezuelan government is urging international energy companies to generate their own electricity for oil and natural gas projects in an effort to shield the grid from the additional load.

Delegations from Siemens and General Electric visited the country in April and held talks with the Venezuelan government headed by Acting President Delcy Rodríguez. However, the two corporate giants are reportedly “hesitant” to take part in major projects due to doubts over Caracas’ financial capabilities.

Additionally, in mid-May, US Chargé d’Affaires in Venezuela John Barrett held a meeting with Electricity Minister Rolando Alcalá to discuss plans to “restore a reliable energy supply through US investment and collaboration.”

Electricity generation in Venezuela depends heavily on the 10 MW-capacity Guri hydroelectric complex in Bolívar state, making the system particularly vulnerable to climatic factors such as the high temperatures affecting the country. Venezuela suffered nationwide blackouts in 2019, with authorities blaming US-led cyberattacks.

The electricity reform follows legislative overhauls to the hydrocarbon and mining sectors that likewise curtailed the state’s role and responsibilities while granting private corporations expanded control over operations and sales, slashed royalties and taxes, and the ability to bring disputes to international arbitration bodies.

Edited by Ricardo Vaz in Caracas.