The Sandinista government is set to acquire 16% of the shares of energy distribution company Union Fenosa and get representation on its board of directors, according to an agreement reached last weekend.
The agreement, which must be approved in a National Assembly, is being called a victory for the Sandinista government in its ongoing struggle with Union Fenosa.
“The Nicaraguan people, by means of the state, ought to have a right to a percentage of the shares of Union Fenosa. Because we don’t have a single share in that business while Union Fenosa owes the Nicaraguan state $70 million,” Ortega said at the speech three days before the Spanish company agreed to sell part of its shares.
While Union Fenosa owes Nicaragua $70 million, the government owes Union Fenosa up to $55 million in subsidies and payments, putting the company’s debt balance around $15 million – the value put on the shares that Fenosa agreed to sell to Nicaragua.
For Ortega, who champions a mixed economy, the agreement will help to reverse “neo-liberal” policies put in place since the Sandinistas were voted out of power in 1990. Over the past 17 years many state-run services, such as energy, education and telecommunications, have been privatized – a move strongly criticized by Ortega.
Energy and Mines Minister Emilio Rappaccioli told the official government radio station, Radio Ya,Monday that the forthcoming law against electricity fraud must be passed in the National Assembly before the Union Fenosa agreement can take effect (see separate story, Page 5). He said the Sandinista government plans to use its sway on the company’s board of directors to guarantee power to 60,000 Nicaraguans who don’t receive electricity.