President authorizes US$6mn Electricaribe, Electrocosta bailout

Colombia's President Alvaro Uribe has authorized a US$6mn bailout for two distributors, Electricaribe and Electrocosta, controlled by Spain's Union Fenosa, according to local neewspaper El Tiempo. Just as they did in January, Electricaribe and Electrocosta will issue new shares to pay for power purchases to be made in September from Barranquilla-based state generator Corelca. The generator would in turn transfer the shares to state-owned oil company Ecopetrol for natural gas used at the Tebsa thermoelectric power plants, and Ecopetrol would use the shares to pay off its debts with the government. The two distributors have will settle US$6mn for power purchased in July, but have yet to negotiate the bill for August. Union Fenosa currently owns a 70% stake in the two distributors; it was not immediately clear whether the Spanish company would also be injecting capital to maintain its controlling stake. In January, Electricaribe and Electrocosta paid off 48bn pesos through a capital increase that was subscribed by Corelca and Spain's Union Fenosa. Meanwhile, Corelca president Alfonso de Mares was quoted by the newspaper as saying that the government is preparing to hire consulting firms to evaluate the best options for re-capitalizing Corelca and Urra, Hidroprado and Termopaipas. Electricaribe and Electrocosta spokeswoman Monica Santander was not available for comment Friday afternoon.