October 16, 2009 / 2:18 PM / 8 years ago

Bolivia to take over power firms this month- report

* Bolivia wants 60-70 percent stake in power generators

* State currently holds 50 percent share

* Government negotiating takeover with owners

By Eduardo Garcia

LA PAZ, Oct 16 (Reuters) - Bolivia’s leftist government aims to secure a controlling stake in three power generation companies before the end of the month, a senior energy official was quoted as saying on Friday.

President Evo Morales, a close ally of Venezuelan President Hugo Chavez, nationalized the Andean nation’s key natural gas industry soon after taking office in 2006 and has since seized control of several utility and commodities-related companies.

A handful of foreign firms have launched legal actions over the compensation they were offered for the takeover of their assets by Morales, who is striving to step up state control of the economy.

Deputy Electricity Minister Miguel Yague told state news agency ABI the government aimed to secure a 60 to 70 percent stake in three power generation companies, two of which are controlled by foreign investors.

“I think we’re going to wrap up the negotiations before the end of the month. What we’re doing is complying with the National Development Plan, which says we have to retake control of the companies that were once owned by the state,” he was quoted as saying by the news agency.

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 Econergy 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 Bolivian consortium called the Bolivian Generating Group.

In each of the three firms, half the shares are held by private investors with the rest held by the state.

Editing by Lisa Shumaker and Helen Popper

Our Standards:The Thomson Reuters Trust Principles.
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