Sistema Electrico de Nueva Esparta

Cancelled

Venezuela privatized its first state-owned electricity asset on Sept. 15, 1998, selling a 70% stake in 180.5-MW Sistema Electrico de Nueva Esparta (SENE), the integrated system serving island-based Nueva Esparta State, to the Enelmar SA consortium led by CMS Energy for $63 million. This winning bid exceeded the $35 million minimum price established by the government. Another 20% of the stake was sold to the company employees and 10% through an initial public offering (IPO) in the local stock exchange. SENE serves about 90,000 customers on the resort islands of Margarita, Coche and Cubagna. Electricity demand there has been growing at about 7% annually in recent years. A 20% ownership share in SENE will be reserved for employees and 10% will be offered on the local stock exchange. Prior to privatization SENE was a unit of governement-held utility Cadafe. CMS Energy, holding 70% of Enelmar, and its Venezuela partners Casa Paris SA, with 25% and Consultores Occidentales SA, 5% obtained a 50-year service concession for SENE and a guaranteed tariff structure with rates closely tied to the US dollar. SENE's system currently comprises the 175-MW Luisa Caceres de Arismendi thermal plant, the 6.5-MW Coche thermal plant, 115-kV and 34.5/13.8-kV distribution lines, and a 100-MW capacity submarine cable linking Margarita to the mainland. The concession contract also sets out standards of service quality and gives the new owners three years to reach compliance. The concessionaires will be fined for service interruptions and customers reimbursed for the value of the lost electricity. The sponsors will invest US$ 90 million in the 1999-2001 period (an average of US$ 30 million per year). In Feb 2007, Venezuela's state oil firm PDVSA bought Nueva Esparta state-based power company Seneca from US major CMS Energy for US$106 million. http://www.seneca.com.ve/ The contract was canceled in April 2007 when the government bought the shares of private sponsors. See filing system None