Brazil, Mexico, and Venezuela

Brazil, Mexico, and Venezuela are similar in that their privatization efforts have been fairly limited. A total of five foreign companies have invested in the electricity industries of Brazil, Mexico, and Venezuela (Table 9).



Brazil enacted a 1993 law that allows large electricity consumers to build and operate their own generating facilities and sell any excess power to a public utility {see Endnote 279}. A second electricity law is under consideration, which would separate power generation, transmission, and distribution as has been done already in Argentina, Bolivia, Chile, and Peru.

Thus far, no foreign investment has actually been made in Brazilian electricity. The single major electricity sale consumated involved the purchase of a stalled hydroelectric plant by a Brazilian consortium. However, another attempt by Brazil to entice foreign investment may be made soon with the offer of four regional subsidiaries of Electrobras, the Brazilan state utility. Also, AES Corp, a U.S. electricity generator, has opened an office in Brazil, which is one tangible sign of possible future foreign investment.

Mexico's attempt at electricity sector reform has consisted of recently passed legislation allowing private companies to import power supplied as a private service to the private sector. However, any surplus power must be sold to the Mexican state utility company, CFE {see Endnote 280}. Central and South West Company, New World Power, and PP&L Resources (all U.S. companies) have power generation projects underway in Mexico, all of which will sell wholesale power after completion.

Venezuela recently made its third unsuccessful attempt to sell state electric utility assets. Five state-owned generation and distribution companies with a total generating capacity of nearly 5 gigawatts have now unsuccessfully been offered for sale {see Endnote 281}. Venezuela plans substantial expansion of its power generation capacity, which should provide ample opportunities for foreign investment {see Endnote 282}. However, only two companies, both based in the United States (Community Energy Alternatives and Public Service Enterprise Group), have currently invested in Venezuelan power generation.