Nicaragua's Sandinista government is set to acquire 16% of the shares of Spanish utility Union Fenosa and representation on the energy giant's board of directors, according to an agreement reached over the weekend.
The agreement, which now must be approved in National Assembly, dominated by the opposition, is being called a victory for the Sandinista government in its ongoing power 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 a speech in Managua three days before the Spanish company agreed to sell the 16%.
While Union Fenosa owes Nicaragua $70 million, the government owes Union Fenosa up to $55 million in subsidies and service payments, putting the company balance with the state at 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 to place since the Sandinistas were voted out of power in 1990. Since then, 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 yesterday that the forthcoming law against electricity fraud must be passed in the National Assembly in order for the Union Fenosa agreement to take effect. 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. |
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