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.
EDITORIAL
An article published in Elmundo.com.sv 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. "
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. "
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.
The decision of the Paris Court of Appeals means that ENEL can become the majority shareholder in the geothermal company La Geo.
This new resolution validates the verdict of the International Chamber of Commerce (ICC)’s Court of Arbitration, issued in July 2011.
According to Elsalvador.com: "In a note sent to the National Stock Market Commission (CNMV), Enel’s renewables subsidiary reports that the French court "had rejected Ine’s appeal to override the award in its favor, confirming that the trial was conducted fairly," according to the news agency Europa Press.
Latin America is one of the most promising renewable energy markets for Enel Green Power, which plans to invest more than 2 billion Euros by 2016 for the development of renewable energy in the region.
Latin America is a rapidly expanding market, where it is expected that energy demand will have an average annual growth of 3.5% by 2020.
To meet this growing demand, "renewables will play an important role and we have about 830 MW of renewable capacity in operation, capable of producing over 3.4 million kilowatt hours of energy with zero emissions," said Enel Green Power (EGP)’s area manager for Iberia and Latin America Maurizio Bezzeccheri in a recent interview.
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 Green Power says there is room to diversify sources of energy in Central America .
Representatives of the company, which has presence in Brazil, Mexico and Chile, have shown interested in developing geothermal projects in Guatemala, where they are diversifying the development of energy sources.
Legal stability, foreign investment protection and a business friendly environment are the elements that companies such as Enel are looking for in order to bring their business to Central America.
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