The government of Panama has sold majority stakes in three electricity distribution companies, despite the economic turmoil in Asia which threatened to disrupt the auction. Only three of 17 prequalified bidders made offers for the 51 per cent stakes in the distribution firms, Reuters reports. Even so, the government achieved almost double the set price.
The three companies were created by splitting the distribution operations of the state-controlled Hydraulic Resource and Electrification Institute (IRHE) into three regional providers; Metro-Oeste supplying Panama City and the centre of the country, Noreste to supply eastern Panama and the second city, Colon, and Chiriqui which serves western Panama.
The stakes in Metro-Oeste and Chiriqui were sold to Distributador Electrica del Caribe, a subsidiary of the Spanish Union Fenosa, for $212 million. The US company Constellation Power took the 51 per cent stake in Noreste for $90 million.
Many companies which prequalified but decided not to bid are also prequalified for the sale of four generating companies in Panama, due to take place on 20 October. A factor that may have affected the decision to bid by some companies was a surprise announcement in August by the Panamanian president that electricity rates would be reduced by 11 per cent from November.