The government and the International Monetary Fund (IMF) have made the first revision to the stand-by agreement as a result of the repossession of Spanish private electricity company Union Fenosa by the Dominican state. The IMF asks that the government study the terms of the deal between the Dominican electricity board (CDEEE) and Union Fenosa in detail and that they offer concrete guarantees on the long-term fiscal and financial sustainability of the power sector. Some reports cited by Diario Libre indicate that this may mean a month’s delay in the signing of the IMF agreement, and amounts to a renegotiation of the deal. Diario Libre also reports that the IMF has given the government 15 days to provide the specifics on where they will get the additional funds to cover the annual payments of US$48 million over 12 years to the Spanish company.
The Central Bank (CB) announced yesterday that President Hipolito Mejia has appointed a committee to follow up the issue, composed of the Finance Minister, the Technical Secretary to the President’s office, the director of the CDEEE, and representatives of the IMF, Inter-American Development Bank and the World Bank. According to a statement by the CB, the committee aims to have the information ready in a matter of days. They also deny that the departure of the IMF mission had any negative connotations, saying “missions enter and leave the country in the course of their work.”
Hoy newspaper explains that the government resumes the control over 100 electricity substations, 44 offices nationwide. At the time of the takeover, Edesur and Edenorte had a payroll of 1,700 employees and a portfolio of 750,000 clients.
PLD Presidential candidate Leonel Fernandez expressed his concern at the situation. “If the government was planning a deal with Union Fenosa, it should have been within the framework of the IMF agreement,” said the former President, in whose assessment of the IMF delegates’ departure and the possible postponement of the lending bodies’ disbursements could only cause the dollar to rise further, with serious consequences for the economy. The papers note that the peso has fallen against the dollar for the second day running, to an approximate rate of RD$34 to US$1.