Reuters
CARACAS, Nov 10 (Reuters) – Venezuelan lawmakers approved a reform on Tuesday to the country’s electricity law, opening the unreliable power sector to private investment after nearly two decades of state control.
The reform is the latest pushed by interim President Delcy Rodriguez, who wants to foster private investment in oil, gas and mining following the US ouster of then-President Nicolas Maduro in January, and despite investor caution.
Venezuelans have long endured patchy public services, with power blackouts for millions of people lasting hours or days. Much of the country’s grid needs extensive maintenance, which Venezuela has not carried out as it struggled with hyperinflation and economic sanctions. Power outages also disrupt water supplies, cellphone and internet services, and undermine agriculture and other industries.
Rodriguez has said stable power is a top priority, but the cash-strapped country has not guaranteed payments to suppliers that could help shore up the grid. Less than 40% of Venezuela’s generation capacity is currently available.
«Opening the market is necessary so that the private sector can also provide electricity, especially to large consumers, and above all to industry,» Jorge Rodriguez, the head of Venezuela’s National Assembly, said after the vote.
LAW ALLOWS GOVERNMENT JOINT VENTURES
The new law allows private companies to enter the sector through joint ventures with the government for up to 25 years. Companies can now also operate through contracts with state oil companies.
The Inter-American Development Bank is drafting a two-year engagement plan for Venezuela focused partly on electricity and social protection, IDB President Ilan Goldfajn has said.
Venezuelan authorities are considering seeking a bridge loan from Qatar to clear more than $2 billion in arrears to the IDB to facilitate fresh financing from the lender, people familiar with the matter have said.
Frequent power cuts can be especially dire for agriculture and food production, which require refrigeration.
Much of the country’s west lacks power for at least a few hours each day.
«We went from rationing blocks of 4 hours a day to 18 and even 20 hours without power,» 60-year-old Heriberto Labrador, a dairy farmer in Tachira state in western Venezuela, said.
Labrador, who said it has been at least 10 years since his business could use milking machines or refrigerators due to the power cuts, was anxious to see improvements in energy supply.
«The only thing we’re worried about is how long will it take for a company to establish itself, and when will we begin to feel the benefits so that these power cuts go away?»
