The Venezuelan government has entered into an agreement with U.S. conglomerate General Electric to enhance the country’s electricity service, marked by frequent blackouts. Critics blame the outages on generation capacity issues, poor maintenance, and mismanagement.

The agreement signing took place at the presidential palace in Miraflores, led by Venezuela’s acting president, Delcy Rodríguez, and Eric Gray, CEO of GE Vernova’s energy segment. This division of General Electric focuses on the generation, transmission, distribution, and storage of electricity.

Rodríguez described the memorandum of understanding, which followed six weeks of collaboration to compile a detailed report on Venezuela’s electric system, as a ‘historic step’ towards ‘recovering a service so essential to a country’s life.’ She urged the teams to finalize the contract quickly. The plan aims to restore 1,000 megawatts in the first 24 months and over 5,000 megawatts in four years. The cost of the agreement was not disclosed.

Experts repeatedly highlight that failures, occurring almost daily across 23 states and the Venezuelan capital, are mainly due to poor administration resulting in the lack of maintenance of the national electric system. The electric facilities, especially the thermal plants, are deteriorating. These once served as backup during droughts or in case of failures at the Guri hydroelectric plant, which provides 60% of the country’s energy. Venezuela’s power deficit is estimated at 3,000 megawatts.

The agreement followed legal reforms since January, dramatically reducing the state’s tight control over the energy sector and opening it to foreign investment. In response to these legal changes, particularly in the hydrocarbons sector, the U.S. Treasury Department began to ease sanctions on Venezuela, increasing the ability of U.S. and other foreign energy companies to operate in the country.

Following a U.S. military operation that deposed and captured former President Nicolás Maduro on January 3, Washington has proposed a ‘three-phase’ roadmap involving the stabilization, recovery, and democratic transition of Venezuela.