Panama: IRHE
Brief on IFC's PPP advisory support to the government of Panama on the privatization of its electricity generation and distribution companies created from the restructuring of its vertically-integrated utility, Instituto de Recursos Hidraulicos y de Electrificacion (IRHE).
IFC advised the government of Panama on the privatization of its electricity genera- tion and distribution companies created from the restructuring of its vertically-inte- grated utility, IRHE. The privatization resulted in an immediate private capital inflow of $600 million and 10 percent reduction in retail tariffs, as well as more than $1 billion in private investment in the privatized companies. The transaction was com- pleted in 1999.
Strategic stakes in the generation companies were sold for a total of $302 million: 49 percent of Fortuna was awarded to a Coastal Power and Hydro-Quebec consortium for $118 million, 49 percent of Bayano and Chiriqui was sold to AES Corporation for $92 million, and 51 percent of Bahia las Minas was awarded to Enron International for $92 million. Strategic stakes in the distribution companies were sold for a total of $301 million. Union Fenosa acquired Metro Oeste and Chiriqui for $212 million, and Constellation Power acquired Noreste for $89 million.
