Rafael Espinal, coordinator of the economics career at the INTEC university in Santo Domingo called for the government to share more details on what would be the first Exim Bank of China loan to the government. The government has announced it is negotiating a US$600 million loan for the energy sector.
“The strange thing about that loan is that it is not in next year’s budget submitted to Congress,” he said. “That is a first wake-up call.” He also criticized that the use of the loan is not detailed.
Espinal said this is not the case of the US$400 million loan that was concurrently announced by the InterAmerican Development Bank to be also used for the energy sector. Espinal said this loan has an executing unit with a series of bidding and administrative conditions that call for close supervision.
An editorial in El Dia complains that in the past 16 years the government has invested more than US$15 billion in similar loans “to improve the financial management” of the electricity sector and has little to show. Technical losses are estimated at 28-35%.
Likewise, the president of the Association of Industries of Herrera (ANEIH), Antonio Taveras Guzmán expressed his concern that the national debt would be increased by US$1 billion “to finance the black hole, the bottomless barrel that the national electricity sector is, where there are no credible plans to reduce losses.” Taveras criticized the delays in the government reaching a consensus for the passing of the Electricity Pact.
In the Dominican Republic, most power distribution and a large part of the production is controlled by the state. Economist Bernardo Vega recently criticized the sector is highly politicized, with politics rather than who pays, deciding many areas that receive power 24/7 without necessarily paying for the service.
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El Dia
7 November 2018
