El Salvador To Appeal LaGeo Ruling

CEL has filed a motion to quash the ruling that would allow Enel to have a majority stake in LaGeo geothermal plant.

Thursday, July 28, 2011

Tóchez Irving, president of the Commission of the Lempa River Hydroelectric Executive, said: "It is inappropriate to put a country’s strategic resource, such as a geothermal plant, into private hands," when presenting the proceedings before the court of appeals in Paris, France.

A month ago, the International Arbitration Court ruled in favor of the Italian company Enel, enabling it to recapitalize its investment in the LaGeo geothermal plant and ordering CEL to allow the $127 million investment.

That amount would go towards expanding the capacity of geothermal electricity generator, energy which would be marketed in El Salvador.

The basis of the dispute is the different interpretation of a stock agreement signed 9 years ago, which Tóchez described as "unfavorable and detrimental to the interests of the country."

"However, he acknowledges that it may once have been conceived with good intentions, but in practice it is not, so he sees it as his duty to use every legal means possible to maintain control of the majority stake in 'this important enterprise owned by the Salvadoran state ', " published Elsalvador.com.

¿Busca soluciones de inteligencia comercial para su empresa?

More on this topic

Funes Denounces Abnormalities in ENEL Contract

January 2013

The President of El Salvador has expressed suspicions that the original contract with the Italian company was changed "in the dark" by government officials.

The president referred to the subject in his radio program last Saturday, saying, "I've asked a group of lawyers to study the documents surrounding all investments with the Italian shareholders and it will be these specialists who might be able to shed a light on this illegal act, including even asking the Attorney General's Office to establish whether criminal liability be established in the future. "

LaGeo Litigation Continues

January 2013

After the last judgment which was unfavorable to El Salvador, officials have announced the continuation of the legal battle against Enel.

Representatives from the Executive Hydroelectric Commission of the Lempa River (CEL) reported that they will abide by the decision of the Parisian Court of Appeals which means that the Italian company ENEL can capitalize the geothermal company LaGeo and become the majority shareholder in the company.

Dispute Over Geothermal La Geo Heats Up Again

March 2012

Two Salvadoran government agencies are insisting on not giving the majority shares in the La Geo generator to Italy's Enel, despite a court of international arbitration ruling against them.

Inversiones Energéticas (INE) and Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL) have again refused to give the Italian company Enel Green Power a majority stake in the geothermal company La Geo, despite a ruling by an international body against them.

Do Public-Private Partnerships in El Salvador Work?

July 2011

The way that the government handles the arbitration failure at the International Chamber of Commerce on the La Geo case could dictate the success or failure of state-business partnerships.

The private-public scheme has been promoted recently by the Salvadoran government for the implementation of large public infrastructure projects because they can free the state from the significant investments that such works require.