Bolivia

Bolivia's new Electricity Law requires the separation of electricity generation, transmission, and distribution. Any companies engaged in one of these activities is required by the law to divest itself of the other activities. Thus, Bolivia, which already privatized its state electric utility, Ende, is potentially restructuring all private firms engaged in their electricity industry.

The sale of its state electrical utility, Ende, made Bolivia one of the first South American countries to allow private investors to enter its domestic electricity market. Ende was broken into three regional generating companies, each of which was purchased by a different foreign company. The purchasers were almost without exception U.S. companies (Table 8). The U.S. companies Dominion Resources and Energy Initiatives (an affiliate of General Public Utilities) each bought one of the three regional companies. The third regional company was purchased by a consortium headed by the Canadian company Bolivian Generating Group, but included Baltimore Gas and Electric and Pennsylvania Power and Light {see Endnote 275}. The regional companies averaged 174 megawatts of generating capacity and split 50 percent of ownership amongst themselves (with Bolivia retaining the other 50-percent ownership share) in exchange for an average of $47 billion and the assumption of $38 billion of debt. The purchasers will operate their plants for 5 years and also have exclusive rights to build any new generating facilities for domestic or export markets.

In addition to the privatization of Ende a few other projects are underway. Most of these projects involve U.S. electricity companies, including Catalyst Energy Corp, Cogenerex, Entergy, and General Public Utilities. Additionally, the Spanish electricity company Iberdrola has made a power distribution investment.