Empresa de Distribucion Sur (EdeSur) and Empresa de Distribucion Norte (EdeNorte)

MIGA has provided Unión Fenosa Internacional S.A. (UFI) of Spain with guarantees of $90 million for its $212 million equity investment in, and shareholder loan to Empresa de Distribucion Sur (EdeSur) and Empresa de Distribucion Norte (EdeNorte) of the Dominican Republic. The coverages are for 13 years and are against the risks of transfer restriction, expropriation, and war and civil disturbance.

The government of the Dominican Republic has been engaged in a comprehensive program to reform the power sector. The sector has long been plagued by frequent, disruptive blackouts throughout the country due to inefficiencies in power generation and transmission, as well as a lack of installed power generation capacity, and limited distribution, especially in rural areas. As state-owned electricity distribution companies are broken up, the involvement of the private sector will play a key role in the accomplishment of this agenda. This project will allow UFI to acquire from the state utility, and rehabilitate two distribution companies, EdeNorte and EdeSur, which together serve more than 75 percent of the country. By injecting foreign capital into the distribution sector, UFI is providing urgently needed short-and long-term investments. The new companies are expected to improve efficiency and quality, decreasing the reliance on expensive selfgeneration. The economy in general will benefit from more reliable service and operating efficiencies, and it is expected that the trade, tourism, industry and construction sectors in particular will see positive benefits. The project will create new jobs, both within the companies themselves, which are expected to add 140 local staff, and provide training for them, and with local construction companies, which are expecting to hire more than 1,700 workers during construction. In addition, the two new companies should help improve the government's fiscal position by reducing operating losses, energy losses, and subsidies.