Washington, D.C., May 14, 2003—The International
Finance Corporation, the private sector arm of the World Bank Group, has
invested US $60 million in HQI Transelec S.A, the primary electricity transmission
company in Chile. This is IFC’s largest equity investment in Chile, and
the first in the country’s electricity transmission sub-sector.
IFC’s investment, in the form of convertible preferred shares, will help
Transelec implement its ambitious investment program to expand and upgrade
its network in order to provide access to the grid to new electricity generating
plants which are expected to come on line in the near future. In addition,
the investment is expected to support Transelec’s plans to develop interconnections
with other transmission systems in Chile, as well as with neighboring countries.
Transelec’s transmission network is currently based in Chile’s Central
Interconnected Transmission System (SIC) which extends over 2,200 km (1,367
miles) and serves over 90 percent of Chile’s population. Transelec owns
and operates approximately 7,471 km (4,642 miles) of transmission lines
that are supported by 59 substations.
Francisco A. Tourreilles, Director of IFC's Infrastructure Department,
said: “IFC is pleased to support a company which is expected to play a
key role in the Chilean electricity sector by strengthening the transmission
network of the country, and responding to the country’s growing electricity
demand. Transelec’s expansion program will improve market access
for power generators and is expected to enhance competition in the electricity
sector, which will ultimately benefit end consumers.”
Bernard Pasquier, IFC’s Director of the Latin America and Caribbean Department,
noted: “With this operation, IFC is supporting one of the few global strategic
investors still investing in the private electricity sector in Latin America
at a time of sharp decline in foreign direct investments in the region.
This investment shows IFC’s commitment to support the private sector in
the region, and its role as a long-term partner.”
Prior to this investment, Transelec was 100 percent indirectly owned by
Hydro-Québec, the major Québec-based producer, transmission provider, and
distributor of electricity. Hydro-Québec acquired Transelec from
Endesa Chile in October 2000 and since that time has embarked upon an important
expansion program in Chile’s electricity transmission sector.
Jacques Regis, president of Hydro-Québec TransÉnergie, the transmission
division of Hydro-Québec
and vice-president of the Board of Directors of Transelec commented “We
are very pleased to welcome IFC as an investor in Transelec and expect
to work closely with our new partner in the development of the company
IFC's committed portfolio in Chile is US$240 million. IFC’s strategy in
the country has been focused in areas where investing can make a significant
developmental impact, with the objective of supporting a traditionally
strong private sector which has been affected by the decline in foreign
private capital flows.
IFC's mission (www.ifc.org)
is to promote sustainable private sector investment in developing countries
and transition economies, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the emerging markets,
mobilizes capital in the international financial markets, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $34 billion of its own funds and arranged
$21 billion in syndications for 2,825 companies in 140 developing countries.
IFC's committed portfolio at the end of FY02 was $15.1 billion.
is an integrated publicly owned company providing services in the energy
sector. Its generating facilities have a total installed capacity of 37,909MW.
In terms of installed capacity it uses water power to produce 93% of its
total output. Hydro-Québec's core mission is to supply Quebecers with the
power they need. Hydro-Québec is also known worldwide for its expertise,
particularly in the areas of hydroelectric generation and high-voltage
transmission. It maintains a presence abroad, where it owns, builds or
operates facilities in Central America, South America, Australia, United
States and Asia.