Electricaribe sale draws six potential bidders

Six local and international firms have expressed formal interest in bidding for control of Colombian electricity distributor Electricaribe.

In a statement, the mines and energy ministry said the companies submitted documents ahead of the May 31 deadline for expressions of interest.

The ministry will now review their credentials before announcing a list of pre-qualifiers by June 12.

Approved companies will be given access to a data room and may request field visits to inspect Electricaribe's infrastructure, it said.

"We view the response with great optimism," the statement said. “It‘s a good first step that shows that, indeed, this process is attractive to companies in the energy sector and can benefit about 10mn inhabitants of the Caribbean region."

The announcement follows a global roadshow in which energy officials held talks with potential bidders from China, Chile, Europe, the US and Colombia.

The government re-launched bidding for control of the distributor in April, four months after aborting the sale due to tepid investor interest.

Changes to the original process include a government commitment to assume Electricaribe's 1.2tn-peso (US$388mn) long-term pension liability and the division of the company's distribution area into two geographical segments.

The CaribeSol area comprises 1.21mn customers in the departments of Atlántico, Magdalena and Guajira while CaribeMar includes 1.51mn customers in Bolívar, Sucre, Córdoba and Cesar departments.

Investors may bid for either or both of the concession areas at separate auctions on September 24 and October 4. To be eligible, companies must have existing distribution operations serving at least 600,000 users and assets totaling US$500mn.

In the case of consortiums, the minimum customer base is also 600,000 spread among the participants, though the leading company must have 450,000 or more current consumers. Additionally, at least one member with a minimum 30% stake in the consortium must have assets of at least US$300mn.

Last week, energy secretary Diego Mesa told BNamericas that the government had committed to invest 850bn pesos to improve Electricaribe's infrastructure, including 500bn pesos this year.

The successful bidder or bidders are expected to invest 8tn pesos over the next decade, he said.

Colombian public services regulator Superservicios took over Electricaribe's operations from Spain's Naturgy in April 2017 after ordering the company's liquidation amid collapsing power services in its distribution area.

Electricaribe serves 2.5mn residential, commercial and industrial customers on the Caribbean coast, accounting for around 25% of Colombia's electricity demand. The company operates a 54,000km power line network and 196 substations, according to its website.