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    Argentina intervenes Italian-owned power company after massive power cuts

    March 21, 2023 - CE Noticias Financieras


      The Argentine government announced the intervention of the Italian-owned electric company Edesur, after weeks of massive power outages.

      Italy's Enel controls 75 percent of Edesur, which is one of Argentina's two largest distributors, and has already announced that it wants to sell the company and withdraw from Latin America's third largest economy. But until that happens, it will have the government administratively controlling its operations for at least the next six months.

      "We want to certify that the works that have to be done are done," said Economy Minister Sergio Massa in announcing the intervention to Edesur. "Neither the ownership of the shareholders nor the concession contract is affected," he added.

      Massa said he believes that Enel's decision to withdraw from the company is affecting "in some way" the provision of service. Edesur has already been criminally denounced by the Argentine government, accused of "abandonment of person" in the midst of power outages that left between 150,000 and 200,000 people without electricity for days in the midst of one of the most intense heat waves in recent decades.

      Edesur has made it known informally that the tariff delay imposed on it by the Argentine government for years is one of the reasons for the drop in service quality. The government, however, points out that Edenor, the other major electricity distributor in the Buenos Aires metropolitan area, is under the same tariff framework and offers a far superior service.

      "The concession was established for 99 years and it has 69 years left on its contract," La Nación recalled. "The concessionaire has guarantees there that would be heard in its favor in the international arbitration court. The majority controlling company is the Italian Enel, which announced the sale of 51% of the shares as of April, through Banco Santander".

      The government will appoint Jorge Ferraresi, former Minister of Housing and known for his political closeness to Vice-President Cristina Fernández de Kirchner, to take over Edesur on behalf of the government.

      Maurizio Bezzeccheri, director of Enel, told "La Nación" that if the government wants to take away the concession it can do so, but that it will then face a lawsuit in international arbitration courts.


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