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Local banks bail out the electricity companies with US$70million
posted on: Mar 24 2010 10:47 by Royston. Viewed 597 times.
The electricity distribution companies Edenorte and Edeeste closed a loan for US$ 70 million from a pool of three local banks to settle their debts with electricity generating companies.
Through the efforts of the Dominican Energy Consortium (CDEEE), agreements were signed with Banco Popular, Banco Leon and CitiBank, during a meeting headed by the chief executive of CDEEE, Celso Marranzini.
Marranzini said that the loan by private banks is a clear sign of confidence in the finances of the electricity distribution companies, who were not eligible for credit after they passed into State hands.
"We have to thank Citibank, Banco Popular and Banco Leon, who have created the funding distribution mechanism and we can repeat this every year as a way to get working capital, as investment and to meet the debts," said Marranzini.
He noted that the financial transaction will enable the country to meet the requirement of the International Monetary Fund (IMF), to maintain a 45 day invoice settlement period with suppliers of electric power.
He argued that now the CDEEE has a favorable situation to negotiate better prices from generators.
The general manager of Citibank in the country, Maximo Vidal said, "From my point of view, we are really grateful for the opportunity and confidence. We are excited about the opportunity, because it is a big step that improves the quality of financing in the electricity sector."
At the signing were the managers of Edenorte and Edeeste, Ruben Bichara and Felix Tavarez, as well as representatives from the banks that granted the loan.
The credit is structured as follows: US$ 35 million from Citibank, US$ 30 million from Banco Popular and US$ 5 million from Banco Leon.
The loan will be repayable during the current fiscal year and will fall due on December 15. CDEEE had the approval of the Ministry of Finance, based on the Law on Public Credit.
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