CAF estimates Venezuela requires $5 billion to rehabilitate electric sector with only 40% capacity operational

Sandra Conde, director of Transport and Energy at the Development Bank of Latin America and the Caribbean (CAF), stated during the VIOGS 2026 conference in Caracas that Venezuela’s installed electric generation capacity stands at 32,800 megawatts, yet only approximately 40 percent remains operationally available. The multilateral lender estimates that rehabilitating and automating the national electric system would require roughly $5 billion in investment. The assessment came as industry executives warned that persistent generation and transmission problems could constrain the launch and expansion of new petroleum and natural gas projects across the country.

The pronouncement reflects a system deficit exceeding 1,500 megawatts, with blackouts intensifying as demand rebounds. Energy Minister Rolando Alcalá announced plans to incorporate 1,300 megawatts during the final quarter of 2026, targeting stabilization of essential services. The ministry detailed forthcoming activation of Unit 6 at Planta Centro, contributing 600 megawatts to the central and west-central regions, alongside seven units in Zulia state adding more than 500 megawatts. These additions form part of a broader target to restore 4,800 megawatts before year-end 2026, though analysts note historical delays in similar recovery timetables.

Venezuela formalized strategic agreements with Eurobras, IMPSA, GE Vernova, and Siemens focused on hydroelectric and thermal generation recovery and supply of original equipment for transmission, generation, and distribution systems. Eurobras is reactivating machines 17, 18, and 20 at the Simón Bolívar Hydroelectric Central at Guri. IMPSA develops projects at the Tocoma and Macagua hydroelectric complexes. GE Vernova and Siemens supply original parts and technology for system repowering. A September agreement between PDVSA and GE Vernova aims to stabilize the grid within six to twelve months, with objectives to add 1,000 megawatts in the first 24 months and an additional 5,000 megawatts over the following four years.

The National Assembly approved in first discussion a reform of the Organic Law of the Electric System and Service permitting private and mixed-capital enterprise participation in generation, transmission, distribution, and commercialization. The legislation must complete legislative procedures before enacting a new regulatory framework. Current international agreements center on equipment recovery, technology supply, and infrastructure rehabilitation rather than operational privatization of installations. Independent engineers estimate that comprehensive system recovery demands between $9 billion and $11 billion over four years, with thermal generation rehabilitation costing approximately $700,000 per megawatt versus $3 million for new capacity.