2005News

Government wants to freeze electricity debt

The Dominican government is contemplating a freeze on the outstanding debt to the electric sector. Electricity Superintendent Francisco Mendez says the “government simply does not have the money” to pay old debts. He promised to pay the interest on the debt and pay the operating expenses of the electric system. Right now, according to El Caribe, the superintendent is negotiating with the different entities in order to obtain a moratorium on capital reduction, so that the debt owed the generators does not keep increasing, on the one hand, and the distributors will promise to pay the generators the cost of generation on the other. The interest rate on the overdue debt has not yet been established, but it is under review. The superintendent also pointed out that the government cannot supply all of the electricity that is needed by the population since there is a 30% deficit in power generation. He hoped that more effective bill collections and better efficiency within the sector would help to reduce the blackouts. Along those lines, he pointed out that the government would keep the Blackout Reduction Program (PRA) for one more year, even at a great cost to the government treasury. This program supplies electricity to the poorest sectors, “practically for free” for as much as 10 or 12 hours a day.