Colombia president seeks end to market cap on utilities

Colombian President Alvaro Uribe Velez announced he wants to end government restrictions that are keeping energy companies from expanding their generating capacity.

Speaking at a ceremony to mark diversion of the Porce River for the 660-MW Porce 3 hydroelectric project, Uribe said his proposal would free private firms to meet growing demand.

Currently, no single company can have more than 25 percent of the Colombian energy generation market. Companies such as Spain’s Endesa, whose Colombia subsidiaries hold 2,865 MW, mostly of hydropower, have asked that the restrictions be lifted. (HNN 12/18/06)

Uribe said he will propose to the Comision de Regulacion de Energia y Gas the lifting of the rule, which was established in the 1990s as a way of avoiding energy monopolies. He said he did not know how long it would take to implement the decision.

The president said February 15 that the national government is committed to removing the 25 percent limit, but only for the addition of new generating capacity, rather than the acquisition of existing plants.

Demand for energy is growing as Colombia’s economy grew by nearly 7 percent last year, according to preliminary government estimates, following a 2005 expansion of more than 5 percent.

�For that reason, the country is going to need to install 600 MW of energy every year,� Uribe said. �And with these restrictions, that is not going to be achieved.�

Government news agency SNE described Porce 3 as the most important generating plant being built in Colombia. With an investment of US$920 million, the project is to be completed in 2011 in Antioquia Province. (HNN 1/16/07)

Colombia utility Empresas Publicas de Medellin (EPM) last month awarded contracts totaling US$16 million to Argentina’s Industrias Metalurgicas Pescarmona S.A. (IMPSA) and Italy’s ATB-Riva Calzoni of Italy to supply gates for the diversion tunnel and outlets. IMPSA previously received a US$36.9 million contract to supply four Francis turbines, while Japan’s Mitsui &Co. Ltd. received a US44.8 million contract to supply synchronous generators.

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