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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Distribuidoras Electricas de Oriente y Occidente
Project ID
875
Fiscal year
2001
Status
Not Active
Guarantee holder
Union Fenosa Internacional S.A.
Investor country
Spain
Host country
Guatemala
Environmental category
A
Sector
Power
Gross exposure
 $96.6 million
Project type
Non-SIP

MIGA is providing insurance coverage for the privatization of two state-run power distribution companies in Guatemala. The $96.6 million guarantee was extended to Union Fenosa Internacional S.A., of Spain, for its equity investment in and loan to Distribuidora Electrica de Oriente S.A. and Distribuidora Electrica de Occidente S.A. The project involves the purchase of 85 percent of shares in the two companies. In addition to assuming management and operational control, the project will help support Guatemala's rural electrification program, a major strategy to address economic imbalances arising from the dearth of electricity in rural areas. The guarantee is protecting the project against the risks of transfer restriction, expropriation, and war and civil disturbance.

By assisting in the implementation of the government's rural electrification program, the project will contribute to the expansion of services to more than 220,000 new customers in underdeveloped areas of Guatemala that have suffered from power shortages and blackouts. The privatization will allow for increased electricity distribution without a substantial addition of generating capacity and for a significant improvement in the delivery of service. The increased reliability and efficiency of power distribution is expected to foster overall economic activity in Guatemala. Moreover, the transfer of skills and technology will result in enhanced customer service, widespread use of metering, and the installation of modern information systems.

   
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