Venezuela’s National Assembly unanimously approved legislation this week that opens the country’s electricity sector to private investment for the first time since nationalization in 2007. The reform permits oil producers to construct power plants for their own operations without state authorization, provided those facilities remain disconnected from the national grid. Other private generators seeking to develop plants exceeding 50 megawatts must obtain concessions from the Ministry of Electric Energy. According to National Assembly president Jorge Rodríguez, these private generators will primarily supply large consumers at government-determined tariffs that have not yet been disclosed. Households unable to afford full-price electricity will retain access to subsidized rates through the state grid.
The state grid currently generates approximately 12,000 megawatts against demand that reached 16,400 megawatts in September, creating a significant supply gap. Venezuela’s hopes for additional capacity depend partly on repair agreements with General Electric Vernova and Argentina’s Impsa, though the government has not yet secured payment commitments from necessary suppliers. The electricity reforms are positioned to support Venezuela’s oil sector expansion, which has faced constraints from inadequate power supply. Oil exports have remained near 1.25 million barrels per day through the summer months, with loading delays reaching up to 30 days at terminals.
The legislation reflects broader efforts to attract foreign investment in oil development. North American Blue Energy Partners, controlled by Venezuelan businessman Alejandro Betancourt, received 100-year concessions over 17 fields in August covering approximately 65 billion barrels of proven reserves. Chevron has indicated plans to increase its Venezuelan operations to approximately 600,000 barrels per day through 2031. The new electricity law allows private and mixed-ownership companies to generate, transmit, distribute and sell power through joint ventures lasting up to 25 years, with a new superintendency to oversee tariffs and service standards.
Power supply challenges have affected Venezuelan citizens and industry substantially. Residents in multiple states reported road blockades and protests over extended outages in September, with some experiencing blackouts lasting up to 16 hours daily. Manufacturing plants averaged 214 hours without power during a four-month period between April and June. Energy experts estimate that stabilizing the grid would require minimum investments of at least 15 billion dollars over three years. The Venezuelan government is pursuing a Qatar bridge loan to address arrears owed to international financial institutions while navigating US sanctions restrictions that affect foreign companies operating in the energy sector.
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