Spanish energy company Gas Natural Fenosa has said it has no choice but to refer the Colombian government to an international arbitration body after the company saw its subsidiary Electricaribe liquidated by the authorities.
Colombia’s Superintendency of Public Services took the decision to dissolve Electricaribe after concluding that it was “not able to provide the service of energy with the quality and continuity due”. The state organisation had taken control of Electricaribe in November “to remedy the poor performance of the service under its responsibility” amid its dire financial straits.
However, Electricaribe’s 85 percent Spanish owner, Gas Natural Fenosa, has hit back at the government, saying the authorities have allowed Electricaribe’s finances to collapse. The company is owed more than €1.3 billion by its customers, a sum that includes large debts by Colombian public agencies.
The firm, which is 20 percent controlled by Global Infrastructure Partners III, argues the country’s regulatory framework does not allow to chase payments sufficiently, noting that its more than 16,000 complaints have resulted in only 85 convictions.
“Gas Natural Fenosa has no choice but to accede to an international institution to resolve the situation created in the manner provided for in the bilateral Agreement on Reciprocal Protection of Investments between Spain and Colombia, a recourse it has been voluntarily putting off so far,” it stated.
The company added that since it took over Electricaribe in 2009, Gas Natural Fenosa has invested over €800 million in the country without dividends being paid. The company said it is willing to continue discussions with the government despite the superintendent declaring the dissolution of Electricaribe “a definitive step to remedy” the energy market.
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