UPDATE 2-Bolivia power takeover talks going well - Morales
* Talks under way since July
* Energy, utilities privatized in mid-'90s (adds details)
By Frank Jack Daniel
PORLAMAR, Venezuela, Sept 27 (Reuters) - Bolivia's leftist President Evo Morales said on Sunday that talks to nationalize electricity firms were going well and that the railway sector also would be targeted for takeover.
"The information I have is that these negotiations are going well," Morales told a news conference in Venezuela, without giving more details of talks with private companies.
Bolivia announced in late July that it was negotiating to take control of electric utilities and to establish the value of the companies.
Foreign companies have controlled power generation and part of the transmission grid in the impoverished Andean country since the mid-1990s, when Bolivia privatized energy, telecommunications and utility companies.
The country's biggest power generators are Corani, Guaracachi and Valle Hermoso. They emerged in the 1990s following the privatization of the state National Electricity Company (ENDE) and account for about half of Bolivia's electricity market.
Corani is 50 percent owned by Inversiones Ecoenergy Bolivia S.A., a subsidiary of France's GDF Suez (GDFZY.PK) (GSZ.PA). Guaracachi is 50 percent owned by Britain's Rurelec PLC (RUR.L) while Valle Hermoso is run by a foreign private firm called the Bolivian Generating Group.
In each of the three firms, half the shares are held by private investors with the rest held by private retirement funds on behalf of Bolivian pensioners.
The largest transmission company in Bolivia is Transportadora de Electricidad, owned by Spain's Red Electrica de Espana (REE.MC).
He said his government would compensate companies affected by nationalization.
"We have an obligation to return their investment. That depends on audits, investigations," he said.
"After so many privatizations in 20 years, we haven't been able to recover everything in 3 1/2 years. We still have the hydro-electric plants pending and then what remains is the area of railways."
In an effort to increase state revenues from the country's abundant natural resources Morales already has nationalized natural gas and mining companies as well as the country's largest telecommunications company.
Morales, who is seeking reelection in December, was speaking during the second day of a summit of African and South American leaders on the Venezuelan island of Margarita.
(Reporting by Frank Jack Daniel; Writing by Andrew Cawthorne and Enrique Andres Pretel)
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