Israeli power company expands in Peru —but gets nationalized in Bolivia

The Israel Corporation, with holdings in the energy sector across South and Central America, has especially targeted Peru for expansion. IC Power, a holding of the Israel Corp Group, already operates four hydro and gas plants in the Andean nation. South American subsidiary Inkia Energy owns 75% of Kallpa Generación, operator of the massive Kallpa Thermo-electric Center, south of Lima, which burns natural gas from the Camisea pipeline. Inkia Energy has also invested hundreds of millions of dollars to build the giant 510-megawatt Cerro del Águila Hydroelectric Center in Tayacaja province, Huancavelica region. IC Power’s plants produce 11.34% of Peru’s electricity, and the company hopes to greatly expand in coming years. While IC Power has operations in Bolivia, Chile, Panama and El Salvador, CEO Javier García sees the greatest potential in Peru. “The Peruvian market is developing and its consumption increases every year,” García told Israel’s YNet news service. In contrast, García said that Bolivia‘s economic climate attracts few investors, despite the fact that IC Power’s holdings there have yielded “nice profits.” (YNet, May 12; Green Prophet, Nov. 17, 2011)

This seems to be a slightly euphemistic statement. On May 1, Bolivia’s President Evo Morales announced the nationalization of the country’s electric grid, which had been privatized in 1997. The main company affected was Transportadora de Electricidad (TDE), whose principal owner is the Red Eléctrica Española (REE). But it seems that the Compañía Boliviana de Energía Eléctrica (COBEE) maintains a monopoly on generation and distribution of electricity in La Paz and the nearby industrial city of of Viacha through its ownership of municipal supplier ELECTROPAZ, as well as in the mining city of Oruro through its ownership of the Oruro Light & Power Company (ELFEO). Stories on the nationalization repeatedly get the ownership of these companies wrong. Spain’s El Mercurio Digital tells us COBEE is controlled by “Canadian capital,” while trade website Power Engineering indicates that ELECTROPAZ and ELFEO are owned from Spain. However, the “Bolivia Holdings” page on the IC Power website states that COBEE is 100% owned by Inkia Energy.

The “Shareholder” page on Inkia Energy’s own website boasts: “For 30 years, Israel Corp has played an important role in the privatization of state companies, transforming them into global companies valued in trillions of dollars, which nowadays are placed within the most innovative, profitable and responsible of their industry.”

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