Corporation remains invested in Central American country
Fortis has settled with the Government of Belize over an expropriation in June 2011 of the company’s interest in Belize Electricity Ltd. (BEL) — the primary distributor of electricity in that country.
Belize Electricity has over 77,000 customers and Canada’s largest publicly traded utility held a 70-per-cent ownership stake in the business at the time the government stepped in.
The case hit the courts and has been under dispute ever since.
In the settlement, Fortis will receive a one-time C$46.2-million (US$35-million) cash payment from the government of Belize. It will retain a common equity position in BEL of roughly 33 per cent.
"We look forward to working with the government and BEL to provide efficient and reliable utility operations in Belize," says Barry Perry, president and chief executive officer of Fortis.
Belize Electricity is a power distributor, but does not produce the 84 megawatts (MW) of power needed to meet peak demand, instead purchasing power from several sources. One of those sources is Belize Electric Co. Ltd. (BECOL) — a hydro power company in which Fortis continues to hold its stake.
BECOL has three power-generating facilities — Chalillo, Mollejon and Vaca. Together, they have a generating capacity of 51 MW.
The agreed settlement on BEL is still subject to legislative approval and conditions. The company expects the details to be settled “in the coming weeks.”
Fortis has experience with expropriation-related battles. In this province, it took the company more than three years to reach a settlement of $76 million in compensation from the Government of Newfoundland and Labrador, in relation to the expropriation of hydro assets tied to the former Abitibi mill in Grand Falls-Windsor.
That settlement included payment of about $22.4 million and transfer of a $54-million loan associated with the assets.
Fortis is parent to Newfoundland Power and maintains its head office in St. John's.