Newly re-elected President Hugo Chavez plans to nationalize Venezuela’s entire electricity sector, including the country’s No. 1 power company, Electricidad de Caracas (EDC), the new economy minister said January 11.
Emboldened by a landslide re-election in December, Chavez vowed January 8 to use his new six-year term to intensify his socialist drive by nationalizing what he called strategic sectors of the economy, including telecommunications and electricity. Chavez also wants Congress to give him more power and to end central bank autonomy.
The television interview of Economy Minister Rodrigo Cabezas was the first time a Venezuelan official had made clear Electricidad de Caracas was a target after Chavez said — without specifying companies — the sector would be nationalized.
Asked twice if Electricidad de Caracas, which is majority-owned by U.S.-based AES Corp., would be included in the nationalization drive, Cabezas said the whole industry would be taken over.
�The entire electricity sector is included because it is a strategic element for the development of the national economy,� he said.
The share price of both Electricidad de Caracas and AES fell after Chavez’ announcement. Cabezas’ additional remarks are expected to have ramifications for U.S. utility CMS Energy, which owns and operates Seneca, a generating company on Venezuela’s Margarita Island.
The Venezuelan state is already heavily involved in the hydro-rich power sector, dominating generation. EDC is by far the biggest private company in the sector, which also includes regional utilities.