Initiation: Bolivian compensation clears path to growth
Rurelec has emerged from four years of uncertainty as its arbitration claim against the Bolivian government for the forced nationalisation of its local power assets has concluded. Compensation of US$31.5m (£19.0m) has now been received, less than half the minimum management originally expected. Some of the proceeds will be used to fund the remaining equity for 296MW of new capacity in Chile and the first phases of 65MW of projects in Peru. Approximately US$25m will be employed to reduce short-term debt. Given the investment required in new capacity, the compensation is not quite the transformative event that was expected, but at least uncertainty has been removed, giving way to a focus on growth prospects.Rurelec is an owner, developer and operator of power generation plants in Latin America. Co.'s main business consists of the ownership and development of power generation facilities on national and regional grids and in isolated areas, selling wholesale electricity as a generator on commercial terms, through capacity payments or power purchase agreements. Co. has operational plant in Argentina, Chile (Arica, and Central Illapa), and Peru. Co. has 50.0% joint arrangement within investment in Patagonia Energy Limited, which owns 100% of Energia del Sur S.A in Argentina.
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