Sunday, May 4, 2014

Bolivia/UK: La Paz Agrees to Reimburse London $31.5 Million for Exproporation of Foreign Assets

According to The Latin American Tribune, Bolivia has agreed to pay $31.5 million to British electric utility, Rurelec, as compensation for the 2010 nationalization of its controlling interest in power producer Empresa Electrica Guaracachi, $10 million less than the amount determined by an arbitration tribunal.

Attorney General Hector Arce said Friday (May 2) at a press conference that the agreement was reached three days earlier at the conclusion of negotiations that followed a January 31 arbitration award handed down by the Permanent Court of Arbitration in The Hague, which set the compensation at $41.8 million.

COMMENT: The positive news from Bolivia's bad acts, of which there have been other examples, is that the theft of foreign assets abroad does have consequences for nations for who fail to adhere to legal boundaries.

London-based Rurelec agreed to waive more than $10.2 million of that total, including $5.7 million in declared, but unpaid dividends.

Bolivia’s leftist president, Evo Morales, expropriated Rurelec’s 50.01% stake in Guaracachi, Bolivia’s largest power generation company on May 1, 2010.

Guaracachi, whose installed electricity capacity in Bolivia rose from 369 MW in 2009 to 454 MW in 2014, accounts for 33% of the Andean nation’s power generating capacity.