Empresa de Generacion Electrica Nor Peru SA

distressed

Failure

Empresa de Generacion Electrica Nor Peru SA or Egenor is one of the companies created when Peruvian ElectroPeru was corporatized for the privatization program. This new generation company had total installed capacity of 405-MW in 1996. It also owned 100 miles of transmission lines. Egenor's generating assets are two hydro power plants (75-MW Carhuaquero and 150-MW Ca¤on del Pato) and six thermal plants (60-MW Chimbote, 20-MW Trujillo and four additional thermal plants totaling 100-MW). The company was partially privatized June 1996 when 60% of the equity was sold for $228.2 million to Dominion Energy who invested $100 million in the expansion of the facilities until 1999. In August 1998, Duke Energy acquired 100% of Dominion Energy's share in this project through Duke's acquisition of Dominion Resources in Latin America. The government next sold 9.65% of the equity to Egenor's workers at the same share price that the winning company paid - a sale of $36.3 million. Finally, the remaining 30% was reserved for a mass privatization scheme sale which in October 1999 was acquired by Duke Energy for a cost of US$ 60 million. This raised Duke's stake in Egenor to 90% with the remaining 10% owned by Egenor's workers by the end of 1999. In 2000, Egenor invested US$ 16 million in the San Diego project, which consists in the construction of two water tanks at the Canon de Pato power plant (construction works started in Mar. 2000 and were expected to be completed by Mar. 2001). In July 2001 Duke acquired an additional 9% of Egenor bringing its total ownership to 99%. With the completion of the tender offer Duke closed the capital of the generator. In 2003, Duke Energy filed a claim against the Peruvean government with an international arbitration tribunal (International Centre for Settlement of Investment Disputes - ICSID). Duke Energy claims that the national tax office in Peru has discriminated against the project company. In December 2016, Duke sold all its Latin American assets to Orazul for US$ 1.2 billion. For further updates in the arbitration proceedings, check: www.worldbank.org/icsis (case n. ARB/03/28). As of December 2009 the international arbitration process was still underway

Energy

World Bank Group

Project

Commercial, Geothermal, Water Supply and Storage, Hydro, Power Generation (CCGT), Residential, Government, Manufacturing (Industrial)