BOGOTA – Colombia’s government on Tuesday ordered the takeover of crisis-hit electricity distributor Electricaribe, a unit of Spain’s Gas Natural Fenosa.
The action was announced by the Superintendency of Residential Public Services, or SSP, via a resolution that “aims to ensure the provision of electricity service in the provinces supplied by Electricaribe: Atlantico, Bolivar, Cesar, Cordoba, La Guajira, Magdalena and Sucre.”
The intervention includes “seizure of the property, assets and businesses of the company Electrificadora del Caribe (Electricaribe),” the public utilities regulator said in a statement.
“Electricaribe’s financial situation could lead to imminent insolvency,” the resolution said, adding that the “available information indicates Electricaribe is not currently in a position to provide electricity service with the necessary quality and continuity.”
The crisis at the company, which provides service to 2.5 million customers in the seven Atlantic coast provinces cited by the SSP, has been months in the making and led customers to complain about frequent power outages.
Electricaribe blames that situation in part on customers’ failure to pay their bills, as well as fraud by electricity consumers.
The company said late-paying customers had cost the company 4.05 trillion pesos (some $1.32 billion) through the end of September and created cash-flow problems.
These difficulties have rendered the company unable to make the investments needed to improve service, it added.
Representatives of the Colombian government and Barcelona-based Gas Natural Fenosa held closed-door talks in Bogota in recent days aimed at finding a way to inject needed capital into Electricaribe but were unable to reach an agreement.