BARCELONA – Spain’s Gas Natural Fenosa said on Tuesday that the Colombian government had temporarily taken control of its beleaguered electricity distribution unit Electricaribe, but stressed that the company was still supplying power to customers.
Tuesday’s action by the Superintendency of Residential Public Services, or SSP, Colombia’s public utilities regulator, was aimed at ensuring the provision of electricity service in the seven provinces where the struggling company operates, it added.
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, has been months in the making and led customers to complain about frequent power outages.
Gas Natural, which owns an 85.38% stake in Electricaribe, said the intervention would not affect the group’s accounts and that it remained fully committed to working together with the Colombian authorities to seek a negotiated solution.
Sources with the Barcelona-based company said the Colombian government stepped in due to a cash crunch at Electricaribe triggered by a high number of unpaid bills and significant consumer fraud.
They said the government intervention would shield the power distributor from its temporary liquidity problems and ensure its viability and normal operations while the company continues to seek a solution that is beneficial to all.
Gas Natural Fenosa began pursuing a negotiated solution to Electricaribe’s crisis a few months ago within the framework of the Spanish-Colombian bilateral agreement for the promotion and reciprocal protection of investments.
Those talks with the Colombian government will continue despite Tuesday’s temporary takeover, Gas Natural Fenosa said.