Argentine energy company Enarsa told to begin privatization

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Tuesday, January 23, 2018

Argentina's energy and mining ministry has instructed the boards of state companies Enarsa and Ebisa to proceed with the former's merger of the latter in a controversial reorganization process to privatize various state assets.

Enarsa is the state energy company, while Ebisa is Argentina's half of the Entidad Binacional that administers the Yacyretá hydroelectric dam with Paraguay,

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Instructions were also announced In Tuesday's official gazette for Enarsa to start the process of selling or transferring the assets, shares and agreements corresponding to the Ensenada de Barragán and Brigadier López thermoelectric power plants, both owned by the state-owned power company, as well managing the transfer of staff and all contracts related to the plants.

In addition, the company has been instructed to sell its shares in Citelec, the parent company of transmission company Transener.

With these changes, the electric power secretariat of the energy and mining ministry will take over the power generation contracts for the Cóndor Cliff and La Barrancosa hydro power projects, currently under construction in Santa Cruz province, a function that until now was the responsibility of Ebisa.

Before any sale of assets, Enarsa and Ebisa have to call a general meeting of shareholders to approve the merger agreements and documents and deal with any other related issues.

Enarsa's board will be responsible for preparing bidding documents for public and competitive sales; convening a general meeting of shareholders to approve the proceedings, deciding on the winning bids and authorizing the transfer of assets, shares and rights to the winning bidders.

The proposed sale of Transener has generated protests from government-allied Radical party (UCR) politicians, who claim the transmission company is important state asset. UCR leaders said that they supported Enarsa's 2016 purchase of Transener "for economic reasons, for strategic reasons and for energy policy reasons," adding that the acquisition was essential to improve the operation of the company.