Colombia’s government has postponed the sale of its 57.61 percent stake in power producer Isagen, with Finance Minister Mauricio Cardenas saying the auction will be delayed for a year.
“This decision will enable us to increase the number of bidders, have greater competition in the process and thereby maximize the value for the nation,” Cardenas said at a press conference.
The would-be bidders asked for the delay due to the “magnitude of the transaction,” which could amount to as much as $3 billion, the minister said.
The funds obtained from the stake sale are to be used to finance major road-building projects.
Companies based in the United States, France, China and Spain have expressed interest in the majority stake in Isagen, which operates Colombia’s largest hydroelectric plant.
The would-be bidders also asked for the postponement due to delays in the start of operations of the Sogamoso hydroelectric dam, which will be one of Colombia’s five largest, Cardenas said.
The government estimates that Sogamoso will begin operating by year’s end and that will “remove an important element of uncertainty for the participants,” the minister added.
All of the proceeds from the sale will be allocated for large highway-building projects, particularly the so-called 4G road concessions, according to the minister.
The 4G program comprises 40 projects in which the government plans to invest a total of 49.5 trillion pesos (some $26.3 billion).
“Isagen is a company whose profitability is less than what the new highways will provide the country economically and socially,” Cardenas said.
The process of privatizing Isagen, a mixed company with both public and private capital, has faced various legal setbacks that have pushed back the auction, originally scheduled for May 2014.
The power company has six plants with a combined generating capacity of 2,212 MW, with hydroelectric dams accounting for 1,912 MW of the total.