Venezuela Opens Power Generation to Private Sector With Concessions of Up to 25 Years
Key Facts
Venezuela’s National Assembly unanimously approved a partial amendment to the Electricity Law on November 10, 2026, opening the way for private and mixed-ownership companies to participate in power generation, according to Spain’s EFE news agency. The decision comes as less than 40% of the country’s electricity generation capacity is operating, according to an estimate cited by Reuters. The amendment provides for generation by the state utility alongside licensed mixed-ownership and private companies. It also allows private companies to receive concessions for up to 25 years. The law thus reopens a sector that had been reserved for the state under previous legislation enacted in 2010, Reuters reported.
The amendment also changes how oil companies obtain electricity, requiring them to rely on self-generation or cogeneration, or contract with third parties, Reuters reported. The wording allows for these solutions to be connected to the national grid. The change is part of a broader opening to private-sector participation, either through mixed-ownership companies with the state or through concessions. Under the amended law, the state utility remains involved in generation alongside other licensed companies. Licenses remain a requirement for private and mixed-ownership generation companies, while concessions may run for up to 25 years.
The electricity sector faces a severe operational crisis: Reuters said less than 40% of generation capacity was operating when it published its report in November 2026. The report said millions of residents endure outages lasting hours and sometimes days. The agency linked the grid crisis to a lack of investment, hyperinflation and sanctions. These conditions frame the reform as an effort to attract new investment to an electricity infrastructure suffering from weak supply. The available information did not include figures for expected financing or a timeline for new projects.
Venezuela relies heavily on hydropower, which supplied 64% of its electricity in 2021, according to the U.S. Energy Information Administration. That dependence leaves the grid vulnerable to fluctuations in water availability and drought, the agency said. Electricity generation also fell from a peak of 120 billion kilowatt-hours in 2013 to 95 billion in 2021. Between 2014 and 2021, generation declined by an average of 2% annually. The Energy Information Administration cited weak maintenance and investment among the reasons for the decline, underscoring the scale of the challenge facing any expansion in generation capacity.
The amendment establishes a legal framework for new operators to enter the market, but private participation remains contingent on obtaining the appropriate license, while concessions may last up to 25 years. The mixed-ownership model allows the state and private capital to participate together, alongside direct contracts for generation services. The practical test will be implementing the rules and attracting investment to a sector suffering from low operating capacity and prolonged outages. The available information did not specify when concessions would begin to be granted or name any companies licensed under the amendment. The National Assembly approved the reform in Caracas on November 10, 2026.