Boston, MA -- (SBWIRE) -- 04/15/2014 -- Despite a small number of power projects coming online over the past year, Venezuela continues to significantly underperform compared with its regional peers. The country's business environment is notably unattractive, with high levels of corruption, an opaque tendering process and extremely low levels of liberalisation within the power market, while the political environment remains precarious, as evidenced by recent protests. Furthermore, electricity output from successfully commissioned plants is at the mercy of Venezuela's ageing and inefficient T&D infrastructure - with power outages still a pressing concern for the majority of the population.
Over the past year, Venezuela's power market has swelled in terms of capacity. For instance, according to a report from Bnamericas, 1.07 gigawatts (GW) have been brought online since energy minister Jesse Chacon announced the short-term plan at the beginning of May 2013, after President Nicolas Maduro declared a state of emergency for the power sector for 90 days in April.
View Full Report Details and Table of Contents
This notwithstanding, our grim outlook for the Venezuelan power sector remains in place. In order to meet demand, which averages between 17GW and 18GW, Venezuela has an installed capacity of approximately 28GW; however, only 20GW are currently operational. The country's business environment continues to present sizeable risks to investment (both industry and country specific). Under Chavez, private enterprise was asphyxiated and rigidly controlled tariff rates led to a lack of capital for investment in sufficient capacity. As detailed below, the situation has hardly improved in the past year. In addition, despite repeated promises from the government, delays and problems with funding continue to obstruct capacity development and improvements to the transmission and distribution (T&D) system in Venezuela.
More specifically, we note that:
- Macroeconomic and political risk factors continue to weigh heavily on the sector. BMI's Country Risk analysts expect near-recessionary economic conditions to prevail over the coming quarters, characterised by a slowdown in private consumption and exports. Additionally, they believe recently-elected President Nicolas Maduro will struggle to exert his grip on power in a highly polarised political landscape, a cocktail far from conducive for significant long-term investments.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Energy research reports at Fast Market Research
You may also be interested in these related reports:
- Kenya Power Report Q2 2014
- Peru Power Report Q2 2014
- Pakistan Power Report Q2 2014
- Russia Power Report Q2 2014
- Brazil Power Report Q2 2014
- Turkey Power Report Q2 2014
- Mexico Power Report Q2 2014
- United Kingdom Power Report Q2 2014
- Poland Power Report Q2 2014
- Hungary Power Report Q2 2014