Teco Energy is a company that was a shareholder of Empresa Eléctrica de Guatemala and years ago claimed international arbitration, arguing that from 2008 to 2013 the National Energy Commission set a maximum amount that energy distribution companies could charge the user. This measure caused losses to the distributor.

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According to Teco Energy, the decision by Guatemalan authorities violated the Free Trade Agreement between the United States, Central America and the Dominican Republic and also reduced the income of investors. This resulted in the International Center for the Settlement of Investment Disputes (CIADI) in favor of the company and against the interests of the country.

Prensalibre.com reviews that "... Randolph D. Moss, a federal judge in Washington DC, had ruled that the State of Guatemala should pay US$21 million to Teco, which in principle demanded US$350 million. However, the PGN, in October 2019, held that Guatemala should not pay that compensation."

After refusing to pay, the New York Supreme Court ordered the seizure of $15.75 million from the State of Guatemala. These resources were to pay the interest on a debt that the country had issued internationally and was due on November 3, 2020.

The Guatemalan Ministry of Public Finance reported that on November 3, "...it received a telephone communication from the New York Mellon Bank, in which they indicated that the funds deposited in a timely manner for the payment of interest on the Eurobond due on November 3, 2020 in the amount of US$15.75 million, were frozen, due to an order from the Supreme Court of the State of New York, within an arbitration process between Teco Guatemala Holdings, LLC and the Republic of Guatemala."

The document adds that "... in this regard, it states that aware of its commitment to honor its payments derived from the placement of bonds in the international market, it is taking the necessary steps in order to resolve this legal inconvenience as soon as possible, stating that it will comply with the payment to its investors, as it has done to date."

Source: prensalibre.com

More on this topic

Guatemala Pays Debt to Teco Energy

November 2020

After Guatemala paid off its debt to Teco Energy, the $15.75 million embargo was lifted, resources that the country had allocated for interest payments from some Eurobond holders.

Arguing that from 2008 to 2013 the Guatemalan National Energy Commission set a maximum amount that electricity distribution companies could charge the user, Teco Energy, a company that was a shareholder of Empresa Electrica de Guatemala, sued the country internationally.

Lawsuit Between Teco and Guatemala To Be Resolved in 2014

November 2013

For the first quarter of 2014 the Center for International Investment Arbitration could issue a ruling on the suit brought against the Guatemalan State.

This was explained by Silvia Alvarado, director of the National Energy Commission (CNEE).

The company "in 2010 went to the International Centre for Arbitration Relating to Investment Disputes (ICSID) claiming that the State gave an unfair and inequitable treatment by setting the Value Added Distribution (VAD) in 2009 at an amount less than requested by the Empresa Eléctrica de Guatemala S.A. (EEGSA), of which Teco at that time was a shareholder along with the Spanish Iberdrola " reported Elperiodico.com.gt.

State of Guatemala vs Teco Energy Litigation

August 2012

A recent ruling by an international tribunal in a dispute between Guatemala and Iberdrola, sets a precedent against the claims of Teco Energy.

The U.S. Corporation Teco Energy, a former shareholder of Empresa Eléctrica de Guatemala (EEGSA), sued Guatemala before the International Centre for Settlement of Investment Disputes (ICSID), in 2010, claiming economic losses caused by a reduction in the Value Added Distribution implemented by the National Energy Commission in 2008.

TECO challenges Guatemalan tariff actions

January 2009

TECO Energy Inc. said earnings at its subsidiary in Guatemala have been cut following actions of a Guatemalan regulatory agency.

As publish in bizjournals.com: "The subsidiary, TECO Guatemala Holdings LLC, has filed notice that it will file an arbitration claim against the Republic of Guatemala under the Dominican-Republic-Central America-United States Free Trade Agreement, or DR-CAFTA, TECO said in a filing with the Securities and Exchange Commission. In July, Guatemala’s National Electric Energy Commission unilaterally reset the distribution tariff for Empresa Eléctrica de Guatemala at levels well below the then existing tariff, the filing said. TECO Guatemala Holdings has a 24 percent interest in Empresa through a joint venture, and the action caused a “significant reduction” in earnings for the joint venture segment, the filing said."