Peru: Electrolima
Brief on IFC's PPP advisory support to the government of Peru for the privatization of Electolima, Peru's second largest electricity generator and Lima's largest distributor, in two transactions.
In 1992, the newly elected government inherited a bankrupt economy and embarked on an aggressive economic development program. Power sector reform was an integral part of the agenda. Given it’s inefficiency and financial losses, state-owned Electrolima, Peru’s second largest electricity generator and Lima’s largest distributor, was an obvious candidate for privatization. IFC acted as adviser to the government for the transaction and Electrolima was successfully privatized in two transactions in 1994 and 1995.
In August 1994, a consortium led by Chilectra of Chile and Endesa of Spain acquired 60 percent of Edelnor for $177 million, while a consortium led by Ontario Hydro of Canada and Chilquinta of Chile acquired 60 percent of the shares of Edelsur for $212 million.
The public tender for the generation company, Edegel, took place in December 1995. A consortium led by Endesa of Chile and Entergy of the United States acquired 60 percent of Edelgel for $424 million plus $100 million in Peruvian debt paper. The sale also involved a commitment by the bidder to add 100 megawatts (MW) of new generation capacity.
