The Colombian government has temporarily taken control of the ailing electricity distribution company Electricaribe, 85.38% owned by the Spanish electricity company Gas Natural Fenosa.
Tuesday’s decision by the Superintendency of Residential Utilities, or SSP, Colombia’s utility regulator, was aimed at ensuring continuity of electricity supply in the seven provinces where the company operates, said the Colombian government.
The crisis in the company, which has 2.5 million customers in the Caribbean provinces of AtlÃ¡ntico, BolÃvar, CÃ©sar, Cordoba, La Guajira, Magdalena and Sucre, has worsened for several months, customers complaining of frequent blackouts current.
Gas Natural says it wants a regulatory framework offering more legal certainty
Gas Natural Fenosa was accused of not having invested in infrastructure and stopped paying electricity suppliers. He said on Tuesday that the Colombian government had intervened due to a cash shortage at Electricaribe caused by a high number of unpaid bills and widespread consumer fraud. It says the company has racked up unpaid invoices of 1.26 billion euros from some 1.5 million of its customers.
Gas Natural Fenosa said the intervention will not affect the group’s accounts and that it remains fully committed to working with Colombian authorities to seek a negotiated solution.
He added that the government intervention would protect the utility company from its temporary liquidity problems and ensure its viability and normal operations while the company continues to seek a solution that benefits everyone.
Gas Natural Fenosa began this summer to find a negotiated solution to the Electricaribe crisis within the framework of the Spanish-Colombian bilateral agreement for the promotion and reciprocal protection of investments.
The crisis at Electricaribe has been taking hold for several months
These talks with the Colombian government will continue despite the temporary takeover on Tuesday, Gas Natural Fenosa said.
Isidro FainÃ© and Rafael Villaseca, respectively president and CEO of Gas Natural, traveled to Colombia this weekend to negotiate a solution with the Colombian government.
Colombian authorities say they have taken over the company for two months, a period that can be extended, while a decision is made on its future.
Immediately after the takeover, Colombian President Juan Manuel Santos tweeted: âThe takeover of Electricaribe, the best result to put the business in order and guarantee the service.
Protegemos energÃa para la Costa. Toma de posesiÃ³n de Electricaribe, la mejor salida para ordenar empresa y Garantizar servicio #CaribeUnido
– Juan Manuel Santos (@JuanManSantos) Nov. 15, 2016
Gas Natural says it wants a regulatory framework that offers more legal certainty for debt collection and says that future investments in the Colombian operation depend on reaching an agreement.
âThe solution is for there to be a reasonable regulatory framework that allows us to reduce arrears and fraud to reasonable levels and allows the company to invest in growth,â Villaseca said earlier this month. .
Electricaribe recorded a loss of 24 million euros in the first nine months of 2016, compared to a net profit of 14 million euros a year earlier.
Fenosa bought Electricaribe in 2000 following its privatization in 1998. In 2009, Gas Natural and Fenosa merged in 2009.
english version by Nick lyne.