Colombia's ISA eyes regionwide power expansion
www.forbes.com Reuters, 03.04.03, 2:59 PM ET By Ibon Villelabeitia
BOGOTA, Colombia, March 4 (Reuters) - Colombia and Ecuador inaugurated a $45 million power line linking the two nations on Tuesday; a move that Bogota-based electricity distributor ISA <ISA.CN> said would pave the way for a common power market across the Andean region. State-controlled ISA, Colombia's largest distributor, and Ecuador's Transelectric, have completed work on a 130 mile (210 km) transmission line with a 260-megawatt capacity across the countries' shared border, ISA President Javier Gutierrez said. "We are taking one step at a time. A year ago we were not in Ecuador and now we are going after Peru. We think it is perfectly possible to become an energy provider in an integrated Andean region market," Gutierrez told a news conference in the Colombian capital Bogota. Last December, energy officials from Colombia, Ecuador, Bolivia, Venezuela and Peru signed a regionwide regulatory structure for energy connection. With control of more than 80 percent of Colombia's high voltage network, ISA plans to build by September 2004 an $18 million power line hooking up transmission lines of Peru and Ecuador through Red Electrica Peruana, a unit of ISA. ISA, which is eyeing agreements to hook up lines with Venezuela and Bolivia, is also studying a $200 million project to connect Colombia's national grids via a cable crossing the inaccessible jungles of the Darien Gap, Gutierrez said. Speaking to Reuters, Gutierrez said the Andean common electricity market could become a springboard for ISA's future incursions into the energy market of southern South America. "We don't have any expansion plans into the south at the moment. But once we get into Peru we can get into Chile or the Mercosur trade block. We are constantly evaluating market opportunities," Gutierrez said. Mercosur includes Brazil, Paraguay, Uruguay and Argentina. In 2002, ISA posted net profits of 23.92 billion pesos, down 76.4 percent from net profits of 101.1 billion pesos in 2001, as a depreciating peso currency greatly increased the costs of the company's debt, which is largely tied to multilateral banks. ISA sales in 2002 jumped 10.2 percent to 555.58 billion pesos, up from 504.05 billion pesos in 2001. The government has a majority 58-percent stake in ISA, which has 13,000 energy pylons and nearly 5,000 miles (8,000 km) of high-and medium-tension lines in Colombia. ISA's network in Colombia has been badly hit by a sabotage campaign by Marxist rebels fighting in a four-decade guerrilla war. In 2002, rebels blew up 458 energy pylons, of which 258 belonged to ISA, Gutierrez said. ISA, which last year issued 120 million shares on the local stock market to raise $58 million for fresh investments, is mulling a listing on an international stock exchange such as New York or Madrid. ($US 1 = 2,959 pesos) Copyright 2003, Reuters News Service