BOLIVIA Trends and Developments Contributed by: Enrique Barrios, Emil Jung and Nina Leguizamón, Dentons Guevara & Gutiérrez
access international capital markets (eg, through bond issuances) suggest an ambition to professionalise the sector. If ENDE were similarly reformed and required to meet transparency and financial reporting stand- ards comparable to those demanded by international debt markets, this would provide additional assurance to private counterparts operating alongside or in com- petition with the state enterprise. Energy Pricing and Subsidy Reform While the Draft Electricity Law’s immediate focus is on market structure and institutional design, it oper- ates within the broader context of Bolivia’s energy pricing challenges. The country maintains significant subsidies across the energy spectrum – including on electricity tariffs – and the government has indi- cated that a comprehensive price study is underway. The approach is deliberately cautious: officials have emphasised the need for an orderly, planned adjust- ment rather than an abrupt shock, drawing lessons from the failed subsidy removal of December 2010, which lasted only five days before being reversed due to social unrest. Bolivia’s electricity generation relies predominantly on natural gas-fired thermoelectric plants, which means that the price of gas directly affects the cost of elec- tricity production. Because natural gas prices in the domestic market are themselves subsidised – forming part of a broader energy subsidy regime that extends across all hydrocarbons and derivatives – the resulting electricity tariffs are also artificially depressed. This creates a cascading distortion: subsidised gas trans- lates into subsidised electricity, which in turn discour- ages private investment in generation (since tariffs do not reflect real costs) and undermines the competitive market that the Draft Electricity Law seeks to create. Notably, the government has already taken concrete steps to address this: in December 2025, it lifted sub- sidies on liquid fuels (gasoline and diesel), signalling a willingness to confront politically sensitive pricing adjustments when accompanied by a structured plan. Whether a comparable adjustment to gas and electric- ity tariffs will follow – and on what timeline – remains one of the most consequential open questions for pro- spective electricity market participants.
For electricity market participants, tariff reform is both an opportunity and a risk. Tariffs that more accurately reflect the cost of generation and distribution would improve the bankability of private projects, but the pace and design of any adjustment will be politically sensitive. The auction mechanism contemplated under Pillar 3 of the Draft Electricity Law may pro- vide a partial solution by allowing market forces to determine generation costs, while the regulator (ERE) oversees transmission and distribution pricing. The Road Ahead: Legislative Process and Timeline The formal submission of the Draft Electricity Law in May 2026 has activated a multi-stage national pro- cess. The bill will undergo technical analysis at UDAPE and CONAPE before proceeding to legislative debate in the Plurinational Legislative Assembly, accompa- nied by consultation with social organisations, produc- tive sectors and communities throughout the country. Minister Medinacelli had originally expressed hope that the four energy-related laws – including the elec- tricity reform – could be finalised, together with their implementing regulations during 2026, with a view to attracting private investment from 2027 onwards. Whether this ambitious timeline can be maintained remains to be seen, particularly given the political complexity of energy reform in Bolivia and the need for broad social consensus. The transition from Min- ister Medinacelli to Minister Marcelo Blanco in April 2026 does not appear to have altered the reform tra- jectory – the submission of the Draft Electricity Law occurred under the new minister’s watch, suggesting policy continuity. The legislative reform effort operates within the con- text of an officially declared energy emergency in the country, which underscores the urgency with which the government is pursuing structural changes across the entire energy sector. This emergency declaration provides the political and institutional backdrop for the accelerated processing of the Draft Electricity Law and related reforms, and signals to the market that the government considers the transformation of the energy framework a national priority rather than a discretionary policy initiative.
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