Venezuela:
Privatization of the SEMDA power system
September 18, 1998
The Venezuelan Investment Fund (FIV) and the Compañía Anónima de Administración de Fomento Eléctrico, CADAFE, identified the seven groups that have pre-classified for the privatization of the power system for the eastern states of Monagas and Delta Amacuro (SEMDA) scheduled to take place in the second half of October. The plan is to sell the majority portion (70%) of the shares to a private investor in a public ceremony for tendering and selecting bids. This will be a strictly cash operation with no financing by Venezuela. The employees of the company will be offered up to 20 percent of the shares, as established in the Privatization Law and the rest of the share package will be placed through the capital market.
The Ministry of Energy and Mines, on the other hand, which together with CADAFE will establish the basic conditions to be included in the purchase-sale agreement, will also give the activities of distributing and selling the company’s power under concession, with monitoring of the service remaining with a group of mayors representing the municipalities of both states.
SEMDA includes the integrated generation, transmission and distribution system that provides electricity in the states of Monagas and Delta Amacuro and covers a surface are of 69,100 km2 with a distribution system serving 83,045 clients.
