LaGeo Conflict DOES Affect Investment

For all the statements made to the contrary by government officials in El Salvador, the truth can't be hidden: legal certainty is the primary factor in making investment decisions.

Tuesday, January 29, 2013


An article published in entitled "Conflict of LaGeo Still Affecting Investment", reports that "according to the Government, the legal battle for majority control of the power generation company LaGeo has not caused, for the moment, concern among potential investors who may be attracted to the country. "

Further on, a transcript of remarks made by the Technical Secretary of the Presidency, Alexander Segovia, further aggravates the concerns of any potential investor in El Salvador: "This legal dispute must be resolved, but ''servicing the interests of the country''". No need to say any more...

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The Indispensible Legal Certainty

October 2011

The Salvadoran Foundation for Economic and Social Development is concerned about SIGET's intervention in the conflict between Italy's Enel and Lageo.

A statement by FUSADES reads:

Legal certainty in public procurement: Necessary element for the investment climate

The legal environment, legal certainty, clear rules and independent institutions are elements that every investor evaluates to measure the business climate in a country and decide whether to invest in it.

El Salvador: LaGeo Case Affecting Country's Image

August 2011

The dispute between the Italian company Enel and the CEL and INE commissions has sent a negative message to foreign investors.

In the opinion of experts, the fact that by the Ente Nazionale per l'Energia elettrica (Enel) and the Lempa River Hydroelectric Executive (CEL) are going through an arbitration process in order to decide who gets majority control of the geothermal plant, could be affecting the country’s attractiveness in terms of foreign investment.

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.

Enel sues Salvadoran Government for $120 million

October 2008

The case was presented before an international tribunal in France, which the parties had established to settle conflicts that might arise in the preparation of the LaGeo.

Italian company, Enel, which partnered with the Salvadoran government in the operation of the LaGeo geothermic electric generating plant, took the government to court internationally for $120 million for not allowing it to hold the majority of shares that corresponds to the investments carried out, based on the contract between the two parties.