BOGOTA – Colombia’s Superintendency of Residential Public Services (SSP) ordered the liquidation on Tuesday of Electricaribe, an electricity distribution and marketing company controlled by Spain’s Gas Natural Fenosa.
The Colombian government had placed Electricaribe in receivership on Nov. 15.
“The liquidation of Electricaribe is ordered,” SSP superintendant Jose Miguel Mendoza said in a press conference, adding that the agency had launched a search for “an operator to take over providing service” in seven provinces on Colombia’s Atlantic coast.
The SSP, Colombia’s public utilities regulator, temporarily took control of Gas Natural Fenosa’s electricity distribution unit to ensure the provision of service in the seven provinces where the struggling company operates.
The crisis at the company, which provides service to 2.5 million customers in the Caribbean provinces of Atlantico, Bolivar, Cesar, Cordoba, La Guajira, Magdalena and Sucre, was months in the making and led customers to complain about frequent power outages.
Electricaribe “is in no condition to provide electric service with the quality and reliability required,” Mendoza said.
“We have taken a positive step forward to fix the structural problems that have led to deterioration in energy service on the coast,” the SSP chief said.
Mendoza said the utility would continue to serve customers while officials execute the liquidation.
“Electricaribe will continue providing energy service in the coastal market under the temporary management of the special agent designated by the superintendency,” Mendoza said.
Gas Natural, a Barcelona-based utility company, took an 85 percent stake in Electricaribe in 2009, with the Colombian government owning the remaining interest in the company.
In November, Electricaribe and the government failed to agree on a capitalization plan for the utility, which has cash flow problems due to the high number of customers who are past due on their accounts.
As of Sept. 30, 2016, Electricaribe’s past-due accounts totaled 4.05 trillion pesos (about $1.32 billion).
Gas Natural Fenosa, for its part, has not ruled out seeking international arbitration via the International Center for Settlement of Investment Disputes (ICSID), a World Bank unit, to resolve its dispute with Colombia.