Venezuela Signs Agreement with General Electric to Enhance Electric Service

The Venezuelan government signed an agreement with the American conglomerate General Electric on Monday. This aims to improve the electric service in the South American nation, which suffers from frequent blackouts. Critics blame these outages on issues with generation capacity, poor maintenance, and mismanagement.

The agreement ceremony at the presidential palace of Miraflores was led by Venezuela’s acting president, Delcy Rodríguez, and Eric Gray, CEO of GE Vernova, a division of General Electric focused on electricity generation, transmission, distribution, and storage.

Rodríguez stated that the signing of the memorandum of understanding, following six weeks of joint work to compile a detailed report on Venezuela’s electrical system, marks a ‘historic step’ towards the ‘recovery of a service essential for the country’s life.’ She urged work teams to quickly formalize the contract to start works aimed at recovering 1,000 megawatts in the first 24 months and over 5,000 megawatts in four years. She did not disclose the cost of the agreement.

Experts frequently point out that daily failures in 23 states and the Venezuelan capital mainly result from poor administration leading to inadequate maintenance of the national electrical system. The electricity installations, particularly the thermoelectric plants that once served as backup during drought seasons or hydroelectric outages at Gurí, which supplies 60% of the country’s energy, show significant deterioration. Venezuela’s power deficit is estimated at 3,000 megawatts.

The agreement followed a series of legal reforms since January, drastically reducing the state’s strict control over the energy sector in place for the last two decades, opening it widely to foreign investment. In response to these legal reforms, particularly in the hydrocarbon sector, the U.S. Treasury Department began easing sanctions against Venezuela, expanding the capacity for U.S. and other foreign energy companies to operate in the country.

After a U.S. military operation deposed and captured then-President Nicolás Maduro on the night of January 3, Washington proposed a ‘three-phase’ roadmap, including the stabilization, recovery, and democratic transition of the country.