El Salvador: Favorable Ruling for Enel Green Power

As expected, the French Supreme Court has ruled in favor of the Italian company, in its attempt to increase its stake in the geothermal station LaGeo.

Thursday, September 18, 2014

In May 2011 the International Chamber of Commerce (ICC) recognized the right of Enel Green Power to increase their investments in geothermal energy in El Salvador and capitalize on these investments through the subscription of new shares in LaGeo. This judgment empowers Enel Green Power to become the majority shareholder of LaGeo.

In 2013, Inversiones Energéticas S.A. de C.V. and Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL), filed an appeal against that decision with the French Supreme Court.

From a statement issued by ENEL Green Power:

The French Supreme Court ("Cour de Cassation") has rejected the appeal filed in 2013 by Inversiones Energéticas, S.A. de C.V. (INE) and Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL)), against the decision of the Court of Appeals which upheld the decision of the Arbitral Tribunal regarding investments in LaGeo SA de CV (LaGeo), the joint venture by Enel Green Power SpA and the INE for geothermal development in El Salvador.

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El Salvador Nationalizes Geothermal Station LaGeo

December 2014

The Italian company Enel Green Power will be selling its stake in the geothermal electricity station LaGeo, which could end to the dispute between the company and the Salvadoran government.

As outlined in an article on Laprensagrafica.com, a transfer of the 36.2% stake belonging to Enel has been valued at $280 million, payable via a trust based on the future flows from LaGeo, an instrument which must be operational before December 15th, 2014. This trust will be later extended to $480 million, a figure that casts doubts on the total price of the Enel shares.

Preliminary Agreement Between El Salvador and Enel Green Power

December 2014

The Attorney General Prosecutor's Office has announced that the government and the Italian company Enel Green Power have reached an agreement to end the conflict over the ownership structure of LaGeo.

From a statement issued by the Attorney General of the Republic of El Salvador (FGR):

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.

El Salvador To Appeal LaGeo Ruling

July 2011

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

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.